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Federal Reserve Bank of San Francisco
FRBSF Economic Letter
Nonmanufacturing as an Engine of Growth
Huiyu Li

In official statistics, manufacturing is the top contributor to U.S. productivity growth despite its shrinking share of employment. However, official numbers tend to understate growth among new producers that improve on existing producers, which is more prevalent outside of manufacturing. Accounting for such missing productivity growth shows that it plays a larger role in sectors such as retail trade and services. Also, the relative contribution of manufacturing to productivity growth has dropped significantly. These findings suggest that nonmanufacturing may be an increasingly important engine of U.S. growth.

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Huiyu Li, "Nonmanufacturing as an Engine of Growth" , Federal Reserve Bank of San Francisco, FRBSF Economic Letter, number 03, 2019.
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