We recently compiled a report on the Top 25 Manufacturing Countries in the World in 2024 and in this article, we will look at the top manufacturing country in the world in 2024.
The manufacturing industry is a key proponent of growth for the global economy. Not only does it contribute heavily to the GDP but also fuels other related industries by creating job opportunities. According to the World Bank, the Value Added Manufacturing industry contributed approximately 15% to the global GDP in 2023. Moreover, there were nearly 13 million workers in the manufacturing sector of the US alone as of May 2024.
Manufacturing Industry Outlook – United States
The United States of America holds the second-largest manufacturing industry in the world after China. The manufacturing value-added output of the United States of America was recorded to be at an all-time high of $2.89 trillion in Q4 of 2023. The industry output increased by 1.16% in a quarterly analysis from Q3 to Q4, and the industry as a whole accounted for approximately 10.3% of the value-added output of the country during the same year. The increased output of the industry is mainly attributed to the momentum gained by 3 legislation that became law in 2021 and 2022. The Infrastructure Investment and Jobs ACT, the Creating Helpful Incentives to Produce Semiconductors and Science Act, and lastly the Inflation Reduction Act. These laws helped prioritize the rebuilding of infrastructure, strengthen the domestic semiconductor industry, and advance clean energy initiatives, thereby fostering job growth, workforce development, and equity in the sector. If you want to read more about manufacturing countries you can look at the 11 Largest Heavy Equipment Manufacturers in the World and 15 Largest Truck Manufacturers in the World.
In terms of investment and economic benefits, these legislations boosted private investment in the manufacturing industry. The investment in the semiconductor industry and clean energy initiatives doubled in 2023 when compared to the investments made in 2021. Moreover, since 2021 more than 200 new clean technology manufacturing facilities worth $200 billion have been established across the country. These new facilities are expected to create around 75,000 new jobs.
However, moving forward to 2024, the industry is expected to face some challenges emerging from economic uncertainty, shortage of skilled labor, supply chain disruptions, and the commitment to reach net-zero emissions. To tackle these challenges industry leaders are focusing on several key initiatives and trends for 2024. To overcome the challenge of talent shortage industry leaders are working on removing obstacles for their employees, according to a survey conducted by the National Association of Manufacturers 46.8% of manufacturing executives are offering flexible work hours to boost worker productivity. Moreover, these executives have also increased worker compensation. According to Deloitte, the average hourly wage of employees in the manufacturing sector increased by around 4% from 2022 to 2023.
In addition, with generative AI and machine learning technologies on the boom, manufacturers are focused on leveraging these technologies to build smart industries. According to the latest survey by Deloitte, 83% of the respondents believe that smart factories will transform the way products are made in 5 years. On the other hand, many industry leaders have already started to adopt data-related technologies into their processes. According to another survey by the same organization, around 70% of the manufacturing executives through their smart factories initiatives have started to incorporate data analytics and cloud computing technologies into their processes.
Companies Contributing to Growth in the Manufacturing Industry
Companies like Caterpillar Inc. (NYSE:CAT) not only contributes heavily to the manufacturing sector of the United States but is also a leader in the global manufacturing market. Caterpillar Inc. (NYSE:CAT) is one of the world’s leading manufacturer of mining, construction, locomotives, and industrial equipment. With its headquarters in Illinois, the company operates in three main business segments including resource industries, construction industries, and energy and transportation. The network of Caterpillar runs through Americas, Asia-Pacific, Europe, and the Middle East.
The company heavily contributes to the manufacturing sector, according to Caterpillar Inc. (NYSE:CAT) annual report 2023, it generated $67.1 billion in sales revenue, $23 billion in services sales, and $2.1 billion through research and development. Moreover, the company employs more than 113,000 manufacturing sector works of the country. The company continues to invest in the manufacturing sector of the United States, on May 16, Caterpillar Inc. (NYSE:CAT) announced to invest $90 million in Texas to prepare its industrial engine facilities in Schertz and Seguin. On the other hand it has grown its global reach as well with approximately 54% of its 2023 sales originating from outside the US.
In addition to this, Caterpillar is also a leader in promoting sustainability in the sector, and has invested more than $30 billion during the past 20 years to deliver innovative and sustainable solutions to the industry. The company has been able to achieve 35% reduction in absolute GHC emissions since 2018 and has reduced landfills intensity by 44% during the same period.
A wide shot of a large manufacturing facility, with workers bustling around the machinery.
Our Methodology
To compile the list of the top 25 manufacturing countries in the world in 2024, we relied on the World Bank’s data on Manufacturing value-added (current US$). From this data set, we ranked the countries based on the most recent data available, which is 2023. Please note that for the United States of America and Japan, the latest data available at the World Bank was for 2021, therefore we used government websites of these countries to cite the Manufacturing value-added figures for 2023. For this article, we have hypothesized that a country with a high manufacturing output in 2023 is likely to have high output in 2024 as well. The list is arranged in ascending order of the total manufacturing value added in 2023. Moreover, we have added population figures for 2024 in our list descriptions sourced from the IMF.
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Top Manufacturing Country in the World in 2024
1. China
Total Manufacturing Value Added in 2023: $4.66 trillion
China will be the top manufacturing country in the world in 2024. It is also known as the manufacturing superpower of the world and is renowned for its low-cost production and its global supply chain of manufactured goods. China not only produces around 40% of the world’s industrial goods, its manufacturing sector contributes more than 30% to its GDP with the total manufacturing value added in 2023 amounting to $4.66 trillion. The country leads in the production and supply of electrical products, machinery, equipment, textiles, clothing, and footwear. It has been able to scale its manufacturing sector mainly on the back of cheap labor stemming from the rural areas of the country.
Curious to learn about other top manufacturing countries? Check out our report on the Top 25 Manufacturing Countries in the World in 2024.
At Insider Monkey, we delve into a variety of topics, ranging from top manufacturing countries to business aspects; however, our expertise lies in identifying the top-performing stocks. Currently, Artificial Intelligence (AI) technology stands out as one of the most promising fields. If you are looking for an AI stock that is more promising than NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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