Ten Industries In Which The US Is No Longer No.1

Americans are used to being No.1 in nearly all the world’s businesses, and athletic endeavors. The foundation of that certainly began to erode in the 1970’s, when much of America’s manufacturing industry started to move overseas.  Many U.S. companies wanted to cut costs, including high-priced manufacturing jobs. That contributed to the rise of the Japanese and, more recently, the Chinese economies.

As U.S. manufacturing eroded,  so did other critical parts of society. American children are no longer the best educated in the world. America’s health care system no longer produces the healthiest population. US GDP no longer grows as quickly as it once did, particularly in the recoveries that follow recessions. China now has the fastest growing large economy in the world. It has passed Japan into the No.2 spot and economists are forecasting how long it will take to pass the US.

America was known for the better part of the last century as the single greatest producer of food for the world. The country still leads in the production of many commodities, but improved farming practices and more advanced seed have allowed the yield per acres in countries like Russia, China Russia and Vietnam to rise.

This is the 24/7 Wall St. analysis of “Ten Industries In Which The US Is No Longer No.1.” Whether this list will grow depends on how quickly the American economy improves and whether business innovation continues to increasingly come from overseas. America now fights to remain competitive globally with one hand tied behind its back. The current deficit, growing national debt, lack of government capital for R&D and unemployment all contribute to a crippled economy. Each of these make it harder for the US economy to regain the ground it has lost over the past few years.

1. Autos
>Position: 2nd
>Leader: Japan, with 17 million autos produced by Japanese automakers in 2009
>U.S.: 12 million autos produced by American automakers in 2009

U.S. auto manufacturing has long been considered not only one of our most critical industries, but is representative of American industrial power . The U.S. is the second largest manufacturer of cars and light vehicles after Japan, which is the headquarters of Toyota (NYSE: TM), Honda (NYSE: HMC), Nissan and Mazda. The American auto industry nearly collapsed in 2008 after years of extremely high labor costs and falling market share in domestic sales. GM (NYSE: GM) and Chrysler went through bankruptcy with extensive federal government support. Ford (NYSE: F) was strong enough to avoid having to ask for government handouts. The U.S. is not only the second largest manufacturer of cars; it is also the second largest car market by sales. China passed America in this metric in 2009. Japanese automakers made 17 million cars in 2009 compared to 12 million made by US companies.

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2. Beer Production
>Position: 2nd
>Leader: China, with 423 million hectoliters in 2009
>U.S.: 229 hectoliters in 2009

US beer production in 2000 was the greatest in the world, generating 232 million hectoliters, versus second-place China’s 220 million. In just nine years, the People’s Republic has roughly doubled its production output to 423 million hectoliters.  American output has actually decreased to 229 million. Per capita consumption in China is relatively low at less than half of the level in the U.S. However, China has a drinking population four times larger and has created an industrial capacity in the beer sector that has allowed the country to pull far ahead of the US.

3. High-technology exports
> Position: 2nd
>Leader: China, $381 billion in 2008
>U.S.: $231 billion in 2008

The World Bank describes high-technology exports as “products with high R&D intensity, such as in aerospace, computers, pharmaceuticals, scientific instruments, and electrical machinery.”
These are all fields in which the United States prides itself, and the U.S. remains in first place in the pharmaceutical industry. Despite this, China has beaten America in the high technology exports since the World Bank began collecting data on the category in 2005. In 2008, Chinese high technology exports were worth $381 billion and American exports were $231 billion. America’s second place status shows no signs of changing. Between 2005 and 2008, Chinese high-tech exports increased 78%, relative to a mere 21% by the U.S. over the same time period.

4. Commercial Aircraft Production
>Position: 2nd
>Leader: Airbus (Europe) based on 574 orders in 2010
>U.S.: Boeing, with 530 orders in 2010

Through the 1970’s, the United States had what was effectively a monopoly on large commercial aircraft production. The nature of the industry made it difficult for other companies to compete with the massive U.S.-based Boeing NYSE: BA). The costs to create an aerospace manufacturing industry were prohibitive. In the 80’s European air manufacturers began to compete through subsidies, particularly European-based Airbus, which was originally formed by France, Germany, Spain, and other investors. Rising demand for Airbus planes have propelled the European company past Boeing to become the largest commercial airplane manufacturer in the world.  In 2010, Airbus was awarded more jetliner contracts than its American competitor. It appears the trend will continue this year, with Airbus securing a massive deal with IndiGo, the third-largest airline in India. It is the largest commercial aircraft sale in history.

5. Coal Production
>Position: 2nd
>Leader: China, with 3.3 billion short tons produced in 2009
>U.S.: 1 billion short tons

America is no longer the world’s largest manufacturing economy nor is it the largest consumer of energy for manufacturing purposes. Coal production in America is now a distant second to China. According to the U.S. Energy Information, the U.S. produced just over a billion short tons of coal in 2009. China produced more than three times that amount – 3.3 billion – because of the exponential growth of the Chinese energy infrastructure in the last decade. Since 2005, American coal production has decreased slightly, while Chinese production has increased 34%. The two countries account for more than half of the world’s total coal production.

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6. Lettuce Production
>Position: 2nd
>Leader: China, with 12.9 million metric tons
>U.S.: 4.1 million metric tons

The population of China at 1.3 billion is more than four times that of the United States. Food consumption is obviously significantly higher as well. Partially because of large federal subsidies, the United States remains #1 in corn and soybean production. Chinese demand has caused domestic production of many crops to move well ahead of that of the U.S. For example, Chinese lettuce production was nearly 13 million metric tons in 2009, while U.S. production was closer to 4 million, according to the United Nations.

7. Oil Production:
>Position: 3rd
>Leader: Russia, with 9.7 million barrels produced each day.
>U.S.:  9 million barrels produced each day
The United States produces the third most oil per day, at just over nine million barrels. The two leaders are Russia, at 10 million barrels per day, and Saudi Arabia, at 9.7 million barrels per day. Despite its current position in production, the U.S. is only 14th in proved reserves, with 19 billion barrels available relative to Saudi Arabia’s 264 billion barrels. The U.S. is now the second largest importer of crude and continued to deplete it reserves to try to be less dependent on foreign crude.

8. Rice Production
>Position:11th
>Leader: China, with 166 million metric tons produced between 2009 and 2010
>U.S.: 6.9 million metric tons
U.S. rice production is not even in the top ten compared to the rest of the world, and accounts for just over 1% of the world’s total. Because of reduced demand, this country is actually the third leading rice exporter with 18% of the world market. About 20% of U.S. rice production is exported. China produces 20 times more rice than the U.S..