Manufacturing Powers the U.S. Economy

Domestically Manufactured Goods Are Used Throughout the U.S. Economy

Products made in America flow through the goods and services sectors as intermediate materials and then to final purchases via consumers, businesses, governments, and exports.

The figure shows the proportion of total manufacturing commodity purchases occurring in each major sector, illustrating where manufacturing goods transactions occur. In the manufacturing industry, manufactured materials are transformed into parts and components that are ultimately incorporated into final goods. For example, steel is produced by its own industry and is transformed into auto parts by other companies, and then the metal parts are sold to motor vehicle assemblers. In this scenario, the multiple sales are all within the manufacturing industry and double count steel—once when sold to auto parts manufacturers and again in the parts sold to assemblers.

The ultimate goal is to sell the goods for final use. An automobile sold to a consumer is classified as personal consumption. When sold to a business, it is an investment expenditure. Similarly, motor vehicles sold to federal, state, and local governments are sales to government purchasers. The only other option for a final use is for the vehicle to be exported. The sum of intermediate and final uses equals the total spending for manufacturing commodities.