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How Small Manufacturing Businesses Drive the U.S. Economy
by Bridget Weston
May 24, 2022
Discussing project at heavy industry factory.

Manufacturing isn’t just for large businesses. In fact, 98.6% of all manufacturing companies in the United States are small businesses and the majority of them have fewer than 20 employees.

Our latest infographic, “Manufacturing & Small Business,” investigates how small businesses fit into the vast world of manufacturing.

At their core, manufacturing businesses create products from raw materials or components either by machines or by hand. Most commonly, these goods are made in plants, factories, and mills, but they’re also made in people’s homes. Small business manufacturers are often nimble enough with their profit margins that they can afford to produce custom or specialty products that larger manufacturers cannot.

Manufacturing Company Sizes

When looking at the relationship between manufacturing companies and how many employees they have, the vast majority of manufacturers have very few employees.

According to the Small Business Administration:

  • 355,467 manufacturing companies have no employees
  • 187,862 manufacturing companies have between 1-20 employees
  • 60,099 manufacturing companies have between 21-499 employees
  • 3,813 manufacturing companies have more than 500 employees

Overall, 75.3% of manufacturing companies have fewer than 20 employees.

Manufacturers are in Every Industry

Although these manufacturing companies may be small, the impact they have on U.S. manufacturing is significant. In 2018 alone, manufacturing generated 11.6% of U.S. economic output.

In the United States, the following percentage of products are manufactured by businesses with under 20 employees:

  • 2.8% of paper products
  • 5.1% of computer and electronic products
  • 5.3% of plastic and rubber products
  • 5.6% of electrical equipment, appliances, and components
  • 6.3% of food
  • 8.6% of machinery
  • 11.5% of beverage and tobacco products
  • 15.2% of wood products
  • 16.4% of fabricated metal products
  • 18.4% of furniture and related products
  • 22.9% of apparel

Despite the impact small businesses have on manufacturing, they continue to struggle to find qualified workers.

Manufacturing Companies and Employment

Currently, 8.6%, or 12.75 million people, of the American workforce is employed in manufacturing. Despite those numbers, however, 89% of manufacturers cannot fill job openings.

Many of these openings are left vacant due to:

  • Shifting skill sets due to advanced technologies
  • Misperceptions of manufacturing jobs
  • Retirement of baby boomers

The lack of talent looking for manufacturing positions is leading to manufacturers that can’t complete or deliver orders, grow production, or answer customer needs.

To address the issue and fill the skills gap, many manufacturers are taking increasingly aggressive measures, such as creating public-private partnerships, developing in-house training programs for multiple generations, and bolstering apprenticeship programs.

Manufacturing is essential to many industries and has a massive impact on the U.S. economy. For small business manufacturers, the future couldn’t be brighter as advances in technology and artificial intelligence provide more automation opportunities. It’s a great time to own a small manufacturing business!

If you’re looking to grow or start your own small manufacturing company, reach out and get started with a SCORE mentor!

About the author
Bridget Weston
Bridget Weston
Bridget Weston is the CEO of the SCORE Association, where she provides executive leadership and works directly and collaboratively with the Board of Directors to establish the vision and direction of SCORE.
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Funded, in part, through a Cooperative Agreement with the U.S. Small Business Administration. All opinions, and/or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the SBA.

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