U.S. Manufacturing Past, Present, & Future

The Industrial Revolution, from the mid-18th to mid-19th century, transformed society from agrarian to industrial. It began in Britain around the 1760s and spread globally, altering production, labor, and living standards.

Key drivers included technological innovations, the shift from wood and water to coal as a primary energy source, economic changes with the rise of factories, and population growth due to improved agriculture.

Impacts included economic growth, reduced costs, increased availability of goods, and widened wealth inequality. Urbanization led to crowded cities, poor living conditions, and public health challenges. Child labor and long working hours prompted reforms like the Factory Acts. Living standards improved for many, while environmental issues like air and water pollution, deforestation, and resource extraction emerged.

Technological advancements transformed transport with railways and steamships, and communication with the telegraph. The Second Industrial Revolution (late 19th century) saw electricity, steel, and chemical industries drive economic growth. Innovations like Bessemer steel and the internal combustion engine further transformed economies, leading to greater global integration and the rise of corporations.

Deindustrialization in the United States

Deindustrialization in the United States began in the late 1960s and early 1970s. The manufacturing sector peaked in employment around 1979 at 19.6 million jobs, but signs of decline emerged earlier.

Post-World War II global competition, particularly from Japan and Germany, eroded U.S. dominance in industries like steel and automobiles. The 1971 collapse of the Bretton Woods system, ending the dollar’s gold convertibility, increased trade imbalances and boosted imports.

Economic stagflation and the 1973–1975 recession hit manufacturing hard. The steel industry saw production drop from 137 million tons in 1970 to 89 million tons by 1982 due to high labor costs and outdated infrastructure. Plant closures in the Rust Belt began as companies faced these challenges.

Deindustrialization intensified in the 1980s due to globalization, trade liberalization, and automation. The 1981–1982 recession led to massive layoffs, with manufacturing jobs falling from 18.9 million in 1980 to 16.7 million by 1983. Offshoring to countries with cheaper labor, especially after China’s economic reforms, gained momentum.

Key Markers of U.S. Deindustrialization:

• 1979: Peak manufacturing employment (19.6 million, BLS).
• 1980s: Rapid plant closures in steel, textiles, and auto industries; rise of service and tech sectors.
• Trade Policies: Increased imports in the 1960s–1970s and NAFTA (1994) shifted manufacturing abroad.
• Manufacturing’s share of GDP dropped from ~25% in 1970 to ~12% by 2000 (World Bank).

2025 and Beyond?

Military activity in Iran may thwart the intended economic turnaround?

How KY-MEP Helps Kentucky Manufacturers Adapt

At KY-MEP, we help manufacturers navigate ongoing industrial change—from workforce challenges to operational efficiency. Whether you're exploring automation, workforce development, or reshoring strategies, our team works with you to build long-term solutions.

Need support in adapting to modern manufacturing trends? Get in touch with us or explore our services to see how we can help.