1. The Importance of Manufacturing Southern New England Economic Summit and Outlook May 30, 2003

2. The Importance of Manufacturing OVERVIEW  Manufacturing Outlook  Campaign for Growth and Manufacturing Renewal

3. GDP Forecast

4. Personal Consumption Forecast

5. Business Investment Forecast

6. International Trade Forecast

7. Changing Face of Manufacturing – Largest Sectors in 1950

8. Changing Face of Manufacturing– Largest Sectors in 2001

9. Manufacturing’s Contributions are Huge: »GDP growth »Productivity »Wages »R&D »International Trade

10. Manufacturing: Largest Contribution to U.S. Economic Growth 1992-2000 Manufacturing21% Software* Finance/insurance Finance/insurance /real estate Retail trade Retail trade Services Services Wholesale trade Wholesale trade Transportation/public utilities Transportation/public utilities Rest of economy

11. Productivity Growth: Higher and Faster Manufacturing Productivity Has Grown 50 Percent Faster Than Overall Productivity Growth

12. Manufacturing Share of Real GDP & Employment GDP Has Remained Constant While Share of Employment Has Declined

13. Manufacturing Pays More: 22 Percent Higher Wages $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 Manufacturing Rest of Workforce Average Annual Compensation Wages Benefits

14. Wholesale/retail Services Agriculture Trans, finance, minerals, construction, etc.. Manufacturing Multiplier: Supports 9 Million Jobs in Other Sectors 0 2 4 6 8 10 12 14 16 Manufacturing Jobs Other Sectors’ Jobs (in millions)

15. Manufacturing R&D American Manufacturers Contribute More to R&D

16. Manufacturing Becomes More Trade-Engaged Leads the Rest of the Economy 0 5 10 15 20 25 30 35 1987‘89’91‘93’95‘97‘99 Manufacturing Overall economy Non-manufacturing Trade as a % of gross output

17. Short Term Challenges: 2001 was a Manufacturing Recession

18. Manufacturing Job Losses – 33 Consecutive Months

19. Manufacturing Job Losses - 33 Consecutive Months

20. Manufacturing: Job Losses by State +3.1% 0-5.9% 6-8.9% 9-10.9% 11+%

21. Manufacturing Jobs Lost Since 2000 # 19 Connecticut27,800 jobs10.5% of all manufacturing jobs # 21 Massachusetts45,200 jobs10.3% of all manufacturing jobs # 7 Rhode Island 9,300 jobs12.2% of all manufacturing jobs ~ ~ ~ #1 Washington State55,700 jobs15.7% of all manufacturing jobs #2 Maine12,600 jobs14.6% of all manufacturing jobs

22. Manufacturing: Underperforming Past Recoveries

23. SOURCE: NAM calculations from Federal Reserve Data

24. Why Such a Sluggish Recovery? *prior 3 recoveries

25. What We Need: NAM’s Strategy for Growth and Manufacturing Renewal: “ a plan of action for the federal government to complement private sector actions to effectively sustain U.S. manufacturing leadership at the top of global competitiveness.”

26. Legislative Issues for Manufacturing: NAM Pro-growth Priorities Reduce Tax Burden Expand International Trade Curb Health Care Mandates Stabilize Energy Pricing

27. »Raise Awareness about manufacturing’s strengths »Draw Attention to Challenges »Identify New Solutions for Structural Problems »Enact Solutions

28. www.nam.org/renewal

29. Workforce Objective– Make manufacturing preferred career choice by 2010

30. The Bad News…Manufacturing Faces a Crisis Little understanding of our importance Negative images repels desirable candidates Education and training systems are not tuned in to our needs WE ARE BEHIND THE CURVE

31. Manufacturing’s Image Is Bad “Dark, dirty, dangerous, dead-end, demeaning” Assembly Line “Torturous and tedious” “Ant in an ant colony” Low pay, lay-offs, polluters and scandal Old Economy,” declining, unimportant, gone off-shore

32. The Good News…We can have a major impact We can increase the number and quality of recruits if manufacturers… Implement a sustained campaign to improve our image Fill the career information void Make high schools, community colleges and universities focus on our needs and skill sets

33. First Report of the Manufacturing Campaign President: announce that manufacturing is a high priority and pursue the right policies Congress: establish National Manufacturing Day and enact the right policies Educators: Take students to modern plants and provide accurate career information Manufacturers: open doors to students and teachers

34. June 10--Second Report Securing America's Future: The Case for a Strong Manufacturing Base Innovation process powering the economy Formula for higher standard of living Troublesome signs

35. October: Third report The high cost of doing business in the US: »Regulatory costs »Taxes »Health care and pensions »Legal system »Energy

36. U.S. Department of Commerce: Field Hearings on Manufacturing Competitiveness Over 20 field hearings around the country New Hampshire on May 29 on IT and telecomm Future hearing in Conn. on aerospace and machinery Interim report in July Final report in September

37. The Importance of Manufacturing Southern New England Economic Summit and Outlook May 30, 2003