U.S. Economy

and plums, grow in northern states including Washington, Michigan,

Pennsylvania, and New York. Citrus fruits—lemons, oranges, and

grapefruits—thrive in Florida, southern Texas, and southern California.

Nuts grow on irrigated land in the Central Valley of California and in

parts of southern California.

Production of specialty crops and livestock has increased in recent

years, particularly along the East and West coasts and in the Southeast.

Ranches in New York and Texas have introduced exotic game, such as emu,

fallow deer, and nilgai and black buck antelope. Deer and antelope meat,

known as venison, is served mainly in restaurants. Specialty vegetable

and fruit operations produce dwarf apples, brown and green cotton,

canola, and jasmine rice. Farmers raise more than 60 specialty crops in

the United States for Asian-American markets, including bean sprouts,

snow peas, and Chinese cabbage.

A2 Forestry

In the 1990s, less than 1 percent of the country’s workforce was involved

in the lumber industry, and forestry accounted for less than 0.5 percent

of the nation’s gross domestic product (GDP). Nevertheless, forests

represent a crucial resource for U.S. industry. Forest resources are used

in producing housing, fuel, foodstuffs, and manufactured goods. The

United States leads the world in lumber production and is second in the

production of wood for pulp and paper manufacture. These high production

levels, however, do not satisfy all of the U.S. demand for forest

products. The United States is the world’s largest importer of lumber,

most of which comes from Canada.

When European settlers first arrived in North America, half of the land

on the continent was covered with forests. The forests of the eastern and

northern portions of the country were fairly continuous. Beginning with

the early colonists, the natural vegetation was altered drastically as

farmers cleared land for crops and pastures, and cut trees for firewood

and lumber. In the north and east, lumbermen quickly cut all of the

valuable trees before moving on to other locations. Only 10 percent of

the original virgin timber remains. Almost two thirds of the forests that

remain have been classified as commercial resources.

Forests still cover 23 percent of the United States. The trees in the

nation’s forests contain an estimated 7.1 billion cu m (249.3 billion cu

ft) of wood suitable for lumber. Private individuals and businesses,

including farmers, lumber companies, paper mills, and other wood-using

industries, own about 73 percent of the commercial forestland. Federal,

state, and local governments own the remaining 27 percent.

Softwoods (wood harvested from cone-bearing trees) make up about three-

fourths of forestry production and hardwoods (wood harvested from broad-

leafed trees) about one-fourth. Nearly half the timber output is used for

making lumber boards, and about one-third is converted to pulpwood, which

is subsequently used to manufacture paper. Most of the remaining output

goes into plywood and veneer. Douglas fir and southern yellow pine are

the primary softwoods used in making lumber, and oak is the most

important hardwood.

About half of the nation’s lumber and all of its fir plywood come from

the forests of the Pacific states, an area dominated by softwoods. In

addition to the Douglas fir forests in Washington and Oregon, this area

includes the famous California redwoods and the Sitka spruce along the

coast of Alaska. Forests in the mountain states of the West cover a

relatively small area, yet they account for more than 10 percent of the

nation’s lumber production. Ponderosa pine is the most important species

cut from the forests of this area.

Forests in the South supply about one-third of the lumber, nearly three-

fifths of the pulpwood, and almost all the turpentine, pitch, resin, and

wood tar produced in the United States. Longleaf, shortleaf, loblolly,

and slash pine are the most important commercial trees of the southern

coastal plain. Commercially valuable hardwood trees, such as gum, ash,

pecan, and oak, grow in the lowlands along the rivers of the South.

The Appalachian Highland and parts of the Great Lakes area have excellent

hardwood forests. Hickory, maple, oak, and other hardwoods removed from

these forests provide fine woods for the manufacture of furniture and

other products.

In the 1990s the forest products industry was undergoing a

transformation. New environmental requirements, designed to protect

wildlife habitat and water resources, were changing forest practices,

particularly in the West. The amount of timber cut on federal land

declined by 50 percent from 1989 to 1993.

A3 Fishing

The U.S. waters off the coast of North America provide a rich marine

harvest, which is about evenly split in commercial value between fish and

shellfish. Humans consume approximately 80 percent of the catch as food.

The remaining 20 percent goes into the manufacturing of products such as

fish oil, fertilizers, and animal food.

In 1997 the United States had a commercial fish catch of 5.4 million

metric tons. The value of the catch was an estimated $3.1 billion in

1998. In most years, the United States ranks fifth among the nations of

the world in weight of total catch, behind China, Peru, Chile, and Japan.

Marine species dominate U.S. commercial catches, with freshwater fish

representing only a small portion of the total catch. Shellfish account

for only one-sixth of the weight of the total catch but nearly one-half

of the value; finfish represent the remaining share of weight and value.

Alaskan pollock and menhaden, a species used in the manufacture of oil

and fertilizer, are the largest catches by tonnage. The most valuable

seafood harvests are crabs, salmon, and shrimp, each representing about

one-sixth of the total value. Other important species include lobsters,

clams, flounders, scallops, Pacific cod, and oysters.

Alaska leads all states in both volume and value of the catch; important

species caught off Alaska’s coast include pollock and salmon. Other

leading fishing states, ranked by value, are Louisiana, Massachusetts,

Texas, Maine, California, Florida, Washington, and Virginia. Important

species caught in the New England region include lobsters, scallops,

clams, oysters, and cod; in the Chesapeake Bay, crabs; and in the Gulf of

Mexico, menhaden and shrimp.

Much of the annual U.S. tonnage of commercial freshwater fish comes from

aquatic farms. The most important species raised on farms are catfish,

trout, salmon, oysters, and crawfish. The total annual output of private

catfish and trout farms in the mid-1990s was 235,800 metric tons, valued

at more than $380 million. In the 1970s catfish farming became important

in states along the lower Mississippi River. Mississippi leads all states

in the production of catfish on farms.

A4 Mining

As a country of continental proportions, the United States has within its

borders substantial mineral deposits. America leads the world in the

production of phosphate, an important ingredient in fertilizers, and

ranks second in gold, silver, copper, lead, natural gas, and coal.

Petroleum production is third in the world, after Russia and Saudi

Arabia.

Mining contributes 1.5 percent of annual GDP and employs 0.5 percent of

all U.S. workers. Although mining accounts for only a small share of the

nation’s economic output, it was historically essential to U.S.

industrial development and remains important today. Coal and iron ore are

the basis for the steel industry, which fabricates components for

manufactured items such as automobiles, appliances, machinery, and other

basic products. Petroleum is refined into gasoline, heating oil, and the

petrochemicals used to make plastics, paint, pharmaceuticals, and

synthetic fibers.

The nation’s three chief mineral products are fuels. In order of value,

they are natural gas, petroleum, and coal. In 1996 the United States

produced 23 percent of the world’s natural gas, 21 percent of its coal,

and 13 percent of its crude oil. From 1990 to 1995, as the inflation-

adjusted prices for these products declined, the extraction of these

fossil fuels declined, increasing U.S. dependence on foreign sources of

oil and natural gas.

The United States contains huge fields of natural gas and oil. These

fields are scattered across the country, with concentrations in the

midcontinent fields of Texas and Oklahoma, the Gulf Coast region of Texas

and Louisiana, and the North Slope of Alaska. Texas and Louisiana account

for almost 60 percent of the country’s natural gas production. Today, oil

and natural gas are pumped to the surface, then sent by pipeline to

refineries located in all parts of the nation. Offshore deposits account

for 13 percent of total production. Coal production, important for

industry and for the generation of electric power, comes primarily from

Wyoming (29 percent of U.S. production in 1997), West Virginia (18

percent), and Kentucky (16 percent).

Important metals mined in the United States include gold, copper, iron

ore, zinc, magnesium, lead, and silver. Iron ore is found mainly in

Minnesota, and to a lesser degree in northern Michigan. The ore consists

of low-grade taconite; U.S. deposits of high-grade ores, such as

hematite, magnetite, and limonite, have been consumed. Leading industrial

minerals include materials used in construction—mainly clays, lime, salt,

phosphate rock, boron, and potassium salts. The United States also

produces large percentages of the world’s output for a number of

important minerals. In 1997 the United States produced 42 percent of the

world’s molybdenum, 34 percent of its phosphate rock, 22 percent of its

elemental sulfur, 17 percent of its copper, and 16 percent of its lead.

Major deposits of many of these minerals are found in the western states.

B Manufacturing and Energy Sector B1 Manufacturing

The United States leads all nations in the value of its yearly

manufacturing output. Manufacturing employs about one-sixth of the

nation’s workers and accounts for 17 percent of annual GDP. In 1996 the

total value added by manufacturing was $1.8 trillion. Value added is the

price of finished goods minus the cost of the materials used to make

them. Although manufacturing remains a key component of the U.S. economy,

it has declined in relative importance since the late 1960s. From 1970 to

1995 the number of employees in manufacturing declined slightly from 20.7

million to 20.5 million, while the total U.S. labor force grew by more

than 46.2 million people.

One of the most important changes in the pattern of U.S. industry in

recent decades has been the growth of manufacturing in regions outside

the Northeast and North Central regions. The nation’s industrial core

first developed in the Northeast. This area still has the greatest number

of industrial firms, but its share of these firms is smaller than in the

past. In 1947 about 75 percent of the nation’s manufacturing employees

lived in the 21 Northeast and Midwest states that extend from New England

to Kansas. By the early 1990s, however, only about one-half of

manufacturing employees resided in the same region. Since 1947, the

South’s share of the nation’s manufacturing workers increased from 19 to

32 percent, and the West’s share grew from 7 to 18 percent.

In the North, manufacturing is centered in the Middle Atlantic and East

North Central states, which accounted for 38 percent of the value added

by all manufacturing in the United States in 1996. Located in this area

are five of the top seven manufacturing statesa—New York, Ohio, Illinois,

Pennsylvania, and Michigan—which together were responsible for

approximately 27 percent of the value added by manufacturing in all

states. Important products in this region include motor vehicles,

fabricated metal products, and industrial equipment. New York, New

Jersey, and Pennsylvania specialize in the production of machinery and

chemicals. This area bore the brunt of the decline in manufacturing’s

value of national output, losing a total of 800,000 jobs from the early

1980s to the early 1990s.

In the South the greatest gains in manufacturing have been in Texas. The

most phenomenal growth in the West has been in California, which in the

late 1990s was the leading manufacturing state, accounting for more than

one-tenth of the annual value added by U.S. manufacturing. California

dominates the Pacific region, which specializes in the production of

transportation equipment, food products, and electrical and electronic

equipment.

B1a International Manufacturing

United States industry has become much more international in recent

years. Most major industries are multinational, which means that they not

only market products in foreign countries but maintain production

facilities and administrative headquarters in other nations. In the late

1990s, giant U.S. corporations began a wave of international

partnerships, with U.S. companies sometimes merging with foreign

companies.

Beginning in the early 1980s, U.S. companies increasingly produced

component parts and even finished goods in foreign countries. The

practice of a company sending work to outside factories to reduce

production costs is called outsourcing. Foreign outsourcing sends

production to countries where labor costs are lower than in the United

States. One of the first methods of foreign outsourcing was the

maquiladora (Spanish for “mill”) in Mexican border towns. Manufacturers

built twin plants, one on the Mexican side and one on the United States

side. Companies in the United States sent partially manufactured products

into Mexico where labor-intensive plants finished the product and sent it

back to the United States for sale. Outsourcing to Mexico became more

widespread after the North American Free Trade Agreement went into effect

in 1994. Firms in the United States also outsource to many other nations,

including South Korea, Indonesia, Malaysia, Jamaica, and the Philippines.

In the 1990s, few products were made entirely within the United States.

Although a product may be fabricated in the United States, some component

parts may have been produced in foreign countries. Despite outsourcing

and the international operations of multinational firms, the United

States is still a major producer of thousands of industrial items and has

a comparative advantage over most foreign countries in several industrial

categories.

B1b Principal Products

Ranked by value added by manufacturing, in 1996 the leading categories of

U.S. manufactured goods were chemicals, industrial machinery, electronic

equipment, processed foods, and transportation equipment. The chemical

industry accounted for about 11.1 percent of the overall annual value

added by manufacturing. Texas and Louisiana are leaders in chemical

manufacturing. The petroleum and natural gas produced and refined in both

states are basic raw materials used in manufacturing many chemical

products.

Industrial machinery accounted for 10.7 percent of the yearly value added

by manufacture. Industrial machinery includes engines, farm equipment,

various kinds of construction machinery, computers, and refrigeration

equipment. California led all states in the annual value added by

industrial machinery, followed by Illinois, Ohio, and Michigan.

Factories in the United States build millions of computers, and the

United States occupies second place in the world in the production of

electronic components (semiconductors, microprocessors, and computer

equipment). Electronic equipment accounted for 10.5 percent of the yearly

value added by manufacturing, and it was one of the fastest growing

manufacturing sectors during the 1990s; production of electronics and

electric equipment increased by 77 percent from 1987 to 1994. High-

technology research and production facilities have developed in the

Silicon Valley of California, south of San Francisco; the area

surrounding Boston; the Research Triangle of Raleigh, Chapel Hill, and

Durham in North Carolina; and the area around Austin, Texas. In addition,

the United States has world leadership in the development and production

of computer software. Leading software producers are located in areas

around Seattle, Washington; Boston, Massachusetts; and San Francisco,

California.

Food processing accounted for about 10.2 percent of the overall annual

value added by manufacturing. Food processing is an important industry in

several states noted for the production of food crops and livestock, or

both. California has a large fruit- and vegetable-processing industry.

Meat-packing is important to agriculture in Illinois and dairy processing

is a large industry in Wisconsin.

Transportation equipment includes passenger cars, trucks, airplanes,

space vehicles, ships and boats, and railroad equipment. This category

accounted for 10.1 percent of the yearly value added by manufacturing.

Michigan, with its huge automobile industry, is a leading producer of

transportation equipment.

The manufacture of fabricated metal and primary metal is concentrated in

the nation’s industrial core region. Iron ore from the Lake Superior

district, plus that imported from Canada and other countries, and

Appalachian coal are the basis for a large iron and steel industry.

Pennsylvania, Ohio, Indiana, Illinois, and Michigan are leading states in

the value of primary metal output. The fabricated metal industry, which

includes the manufacture of cans and other containers, hardware, and

metal forgings and stampings, is important in the same states. The

primary metals industry of these states provides the basic raw materials,

especially steel, that are used in making metal products.

Printing and publishing is a widespread industry, with newspapers

published throughout the country. New York, with its book-publishing

industry, is the leading state, but California, Illinois, and

Pennsylvania also have sizable printing and publishing industries.

The manufacture of paper products is important in several states,

particularly those with large timber resources, especially softwood trees

used to make most paper. The manufacture of paper and paperboard

contributes significantly to the economies of Wisconsin, Alabama,

Georgia, Washington, New York, Maine, and Pennsylvania.

Other major U.S. manufactures include textiles, clothing, precision

instruments, lumber, furniture, tobacco products, leather goods, and

stone, clay, and glass items.

B2 Energy Production

The energy to power the nation's economy—to provide fuels for its

vehicles and furnaces and electricity for its machinery and appliances—is

derived primarily from petroleum, natural gas, and coal. Measured in

terms of heat-producing capacity (British thermal units, or Btu),

petroleum provides 39 percent of the total energy consumed in the United

States. It supplies nearly all of the energy used to power the nation’s

transportation system and heats millions of houses and factories.

Natural gas is the source of 24 percent of the energy consumed. Many

industrial plants use natural gas for heat and power, and several million

households burn it for heating and cooking. Coal provides 22 percent of

the energy consumed. Its major uses are in the generation of electricity,

which uses more than three-fourths of all the coal consumed, and in the

manufacture of steel.

Waterpower generates 4 to 5 percent of the nation’s energy, and nuclear

power supplies about 10 percent. Both are employed mainly to produce

electricity for residential and industrial use. Nuclear energy has been

viewed as an important alternative to expensive petroleum and natural

gas, but its development has proceeded somewhat more slowly than

originally anticipated. People are reluctant to live near nuclear plants

for fear of a radiation-releasing accident. Another obstacle to the

expansion of nuclear power use is that it is very expensive to dispose of

radioactive material used to power the plants. These nuclear fuel

materials remain radioactive for thousands of years and pose health risks

if they are not properly contained.

Some 33 percent of the energy consumed in the United States is used in

the generation of electricity. In 1999 the nation’s generating plants had

a total installed capacity of 728,259 megawatts and produced 3.62

trillion kilowatt-hours of electricity. Coal is the most common fuel used

by electric power plants, and 57 percent of the nation’s yearly

electricity is generated in coal-fired plants. The states producing the

most coal-generated electricity are Ohio, Texas, Indiana, Pennsylvania,

Illinois, West Virginia, Kentucky, and Georgia.

Natural gas accounts for 9 percent of the electricity produced, and

refined petroleum for 2 percent. The states producing the most

electricity from natural gas are Texas and California. Refined petroleum

is especially important in Florida, New York, and Massachusetts. The

leading producers of hydroelectricity are Washington, Oregon, New York,

and California. Illinois, Pennsylvania, South Carolina, and California

have the largest nuclear power industries.

Petroleum is a key resource for an American lifestyle based on extensive

use of private automobiles and trucks for commerce and businesses. Since

1947, when the United States became a net importer of oil, annual

domestic production has not been enough to meet the demands of the highly

mobile American society.

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