The CPA Domestic Market Share Index (DMSI) fell slightly in the third quarter of 2023, continuing the long-term downward trend of U.S. manufacturing production. The DMSI reached 67.5 in Q3 2023, indicating that 67.5% of U.S. manufacturing demand was met by domestic production. The remainder, 32.5%, was met by imports. The DMSI is the only regularly published indicator tracking the share of U.S. manufacturing demand that is met by domestic production. It is based entirely on U.S. government data.
As Figure 1 shows, domestic producers have lost share steadily since 2005, when the quarterly statistical data first became available. Since 2005, domestic producers have lost 9 percentage points of market share to importers, equivalent to a loss of $750 billion of revenue in today’s market. U.S. domestic consumption of manufactured goods ran at an $8.4 trillion annual rate in Q3 last year.
In the COVID years of 2020 to 2022, the DMSI reached levels as low as 65.8%, as consumers responded to the pandemic ban on shopping and dining out by buying more goods, especially computer and internet-related goods, to facilitate work and communications from home. Those goods are heavily dominated by imports. In 2023, domestic share bounced back to the 67%-68% range as consumer spending began to normalize. However, compared to the pre-COVID period—the DMSI averaged 68.5% in 2019—the latest DMSI figures show a slight decline in domestic share.
Domestic Share Losses and Gains by Manufacturing Sub-Sector
The 2020-2022 period was disrupted by the COVID pandemic which caused huge delays in import shipments in the early period, followed by a surge of imports and U.S. spending on consumer goods in 2021-2022. In 2023, spending patterns began to return to normal, although some data suggests the American consumer is still spending more on consumer goods than he/she did before the pandemic.
Nevertheless, we can gain some sense of the underlying trend by comparing the Q3 2023 data to the data for 2019, the last pre-pandemic year. What we find is that of 19 manufacturing sub-sectors, 16 lost share. The largest share loss was in Machinery, which lost four points to post a domestic share of just 54.2% in Q3 last year. Second largest loss was in Electrical Equipment, Appliances and Components, which lost 3.7 points to finish at 32.7%. On the positive side, Other Transportation Equipment gained 7.4 points to reach 78.9% in Q3. This is mostly due to Boeing’s recovery in sales since two notorious crashes in 2018 and 2019 dampened sales in the 2019-2020 period.
Domestic producers lost 1.9 points of share in the employment-intensive motor vehicle sector, down to 61.4% share. In the strategically sensitive computer and electronics sector, U.S. producers lost two tenths of a point to finish at 29.2%. This means over 70% of the computer and electronics goods purchased in the U.S. are imported.
Q3 Trade Deficit in Manufactured Goods at -$276 billion
Trade data for 2023 shows that our deficit in manufactured goods for third quarter 2023 reached negative $276.8 billion, $5.2 billion worse than the Q2 figure. Looking at the sectoral breakdown, 17 out of 19 manufacturing sub-sectors were in deficit in Q3 2023. Most of those sub-sectors have been in persistent deficit for many years.
As shown in Figure 3, the motor vehicles subsector continues to run the largest trade deficit of -$64.7 billion,. The second-largest sub-sectoral deficit was in Computers and Electronics, at -$59.2 billion.
Methodology
The CPA Domestic Market Share Index (DMSI) measures the success of U.S. manufacturing producers in the U.S. market. Over the past two decades, imports have gained a larger share in the U.S. market, leading to millions of lost jobs and industrial decline in many regions and many sectors.
The DMSI is based on the value of production, imports, and exports in U.S. manufactured goods. It is calculated entirely from U.S. government data as the inverse of the import share: DMSI =100*(1-(imports/(output+imports-exports)).
Changes in the reported annual and quarterly DMSI reflect revisions in government data. For more detailed information on the DMSI including downloadable data, please contact jeff@prosperousamerica.org.
CPA is the leading national, bipartisan organization exclusively representing domestic producers and workers across many industries and sectors of the U.S. economy.
Long-Term Downtrend in Domestic Producer Share of US Market Continues
Domestic Market Share Index – 2023 Q3
The CPA Domestic Market Share Index (DMSI) fell slightly in the third quarter of 2023, continuing the long-term downward trend of U.S. manufacturing production. The DMSI reached 67.5 in Q3 2023, indicating that 67.5% of U.S. manufacturing demand was met by domestic production. The remainder, 32.5%, was met by imports. The DMSI is the only regularly published indicator tracking the share of U.S. manufacturing demand that is met by domestic production. It is based entirely on U.S. government data.
As Figure 1 shows, domestic producers have lost share steadily since 2005, when the quarterly statistical data first became available. Since 2005, domestic producers have lost 9 percentage points of market share to importers, equivalent to a loss of $750 billion of revenue in today’s market. U.S. domestic consumption of manufactured goods ran at an $8.4 trillion annual rate in Q3 last year.
In the COVID years of 2020 to 2022, the DMSI reached levels as low as 65.8%, as consumers responded to the pandemic ban on shopping and dining out by buying more goods, especially computer and internet-related goods, to facilitate work and communications from home. Those goods are heavily dominated by imports. In 2023, domestic share bounced back to the 67%-68% range as consumer spending began to normalize. However, compared to the pre-COVID period—the DMSI averaged 68.5% in 2019—the latest DMSI figures show a slight decline in domestic share.
Domestic Share Losses and Gains by Manufacturing Sub-Sector
The 2020-2022 period was disrupted by the COVID pandemic which caused huge delays in import shipments in the early period, followed by a surge of imports and U.S. spending on consumer goods in 2021-2022. In 2023, spending patterns began to return to normal, although some data suggests the American consumer is still spending more on consumer goods than he/she did before the pandemic.
Nevertheless, we can gain some sense of the underlying trend by comparing the Q3 2023 data to the data for 2019, the last pre-pandemic year. What we find is that of 19 manufacturing sub-sectors, 16 lost share. The largest share loss was in Machinery, which lost four points to post a domestic share of just 54.2% in Q3 last year. Second largest loss was in Electrical Equipment, Appliances and Components, which lost 3.7 points to finish at 32.7%. On the positive side, Other Transportation Equipment gained 7.4 points to reach 78.9% in Q3. This is mostly due to Boeing’s recovery in sales since two notorious crashes in 2018 and 2019 dampened sales in the 2019-2020 period.
Domestic producers lost 1.9 points of share in the employment-intensive motor vehicle sector, down to 61.4% share. In the strategically sensitive computer and electronics sector, U.S. producers lost two tenths of a point to finish at 29.2%. This means over 70% of the computer and electronics goods purchased in the U.S. are imported.
Q3 Trade Deficit in Manufactured Goods at -$276 billion
Trade data for 2023 shows that our deficit in manufactured goods for third quarter 2023 reached negative $276.8 billion, $5.2 billion worse than the Q2 figure. Looking at the sectoral breakdown, 17 out of 19 manufacturing sub-sectors were in deficit in Q3 2023. Most of those sub-sectors have been in persistent deficit for many years.
As shown in Figure 3, the motor vehicles subsector continues to run the largest trade deficit of -$64.7 billion,. The second-largest sub-sectoral deficit was in Computers and Electronics, at -$59.2 billion.
Methodology
The CPA Domestic Market Share Index (DMSI) measures the success of U.S. manufacturing producers in the U.S. market. Over the past two decades, imports have gained a larger share in the U.S. market, leading to millions of lost jobs and industrial decline in many regions and many sectors.
The DMSI is based on the value of production, imports, and exports in U.S. manufactured goods. It is calculated entirely from U.S. government data as the inverse of the import share:
DMSI =100*(1-(imports/(output+imports-exports)).
Changes in the reported annual and quarterly DMSI reflect revisions in government data. For more detailed information on the DMSI including downloadable data, please contact jeff@prosperousamerica.org.
DMSI Report Archive
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CPA is the leading national, bipartisan organization exclusively representing domestic producers and workers across many industries and sectors of the U.S. economy.
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