The decline in number of U.S. manufacturing plants

01/30/2013

Daniel J. Meckstroth, Ph.D., vice president and chief economist
Single-minded attention on runaway plants, and for that matter their return to the United States, is misplaced. Relatively few plants are shut down in the United States by an owner who opens up an identical facility abroad and supplies the U.S. market with imports from the foreign affiliate. A widespread, more fundamental reason for plant closings and openings is the sourcing decision (where firms purchase intermediate goods and services -- from domestic or foreign suppliers). Policy Analysis

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