U.S. manufacturing still matters when evaluating the U.S. and global economy. While manufacturing as a percent of the U.S. economy has declined steadily since the end of World War II, its impact is greater than its size. Manufacturing tends to be more cyclical than service activity, and it remains a bellwether for the overall economy. S&P 500 Index companies are heavily skewed toward manufacturing-related activity and changes in earnings growth rates tend to track manufacturing activity. U.S. manufacturing has also become increasingly focused on high-tech industries that invest heavily in research and development. Finally, manufacturing still matters for the global economy—manufacturing has shrunk as a percent of the U.S. economy for decades, but the U.S. economy has also been growing over that period, helping manufacturing expand over the last several decades [Figure 1].