The Manufacturing Multiplier Effect

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Submitted by:  Greg Conder, PE

Manufacturing Multiplier Effect

The manufacturing sector has the largest economic multiplier effect, according to this report from the Manufacturing Institute.  Following manufacturing are the agriculture, transportation and construction sectors.  The report states “every dollar in final sales of manufactured products supports $1.33 in output from other sectors”.

A large manufacturing company may purchase products and services from smaller businesses within the manufacturing sector.  Smaller businesses like machine shops and fabrication shops.  Outside of the manufacturing sector, the large company may utilize products and services such as energy, construction and many professional business services.

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