Machine tool advances bring productivity gains
A report being released today suggests that consumers have saved billions of dollars over the past five years because of technological, material and process advances in the manufacturing of machine tools which are employed in the making of everything from cars to air conditioners to aeroplanes. Advances in machine tools have helped drive down the costs and enhanced the quality and energy efficiency of durable goods in recent years.
The report, prepared for the Association for Manufacturing Technology by Joel Popkin & Co., concludes that:
Indeed, with durable goods prices remaining flat from 1996 to 1999, consumers in the U.S.A. have saved in excess of $101 billion.
Increased productivity in durable-goods manufacturing has added $618 billion to gross domestic product between 1992 and 1998.
To give an example, the introduction of a new kind of compressor whose manufacture required machine tools with a precision down to 10-millionths of a meter, allowed a 10 percent cut in the energy use of air conditioners between 1990 and 1997.
Two academic studies of recent productivity gains have found that more than half of the increase has occurred outside the computers, software and telecommunications sectors.
Economists say that sizeable American productivity gains have yet to be explained. But the manufacturing sector, of which machine tools are a critical part, has probably been a substantial contributor.
Source: Steve Liesman, Crucial Driver of U.S. Productivity Gains May Be Improvements in Machine Tools, Wall Street Journal, September 28, 2000.
For text http://interactive.wsj.com/articles/SB970093920557235207.htm
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Publish date: 25 October 2000
The views expressed in the article are the author’s and are not necessarily shared by the members of the Foundation.