The energy intensity of U.S. manufacturing continued to decrease, according to data released by the U.S. Energy Information Administration’s (EIA) Manufacturing Energy Consumption Survey (MECS). From 2010 to 2014, manufacturing fuel consumption rose 4.7 per cent, while real gross output increased at 9.6 per cent—or more than twice that rate—resulting in a 4.4 per cent decrease in energy intensity.

The share of manufacturing output from energy-intensive industries, such as the manufacture of metals, chemicals, paper, and petroleum and coal products, declined between the MECS surveys covering 2010 and 2014, leading to a decline in overall manufacturing energy intensity.

While many manufacturing establishments are taking steps to reduce their energy consumption, the energy intensity decrease for total manufacturing is mostly the result of a shift of manufacturing output to less energy-intensive industries. If major industries had maintained the same proportions of the manufacturing sector, the energy intensity decline between 2010 and 2014 would have been 0.7 per cent, instead of 4.4 per cent.

One of the fastest growing industries between 2010 and 2014 was transportation equipment manufacturing, an industry with relatively low energy intensity. Gross output in transportation equipment manufacturing grew 30.8 per cent over that period, much faster than the 9.6 per cent increase in overall manufacturing output between 2010 and 2014.

While output and consumption rose, manufacturing employment decreased from 2010 to 2014, yielding an increase in labour productivity. Manufacturing processes continue to evolve, incorporating more electronic and robotic devices, which may be a primary factor in increased labour productivity.

In the United States, energy intensity has been declining steadily since the early 1970s and continues to decline. Defined as energy consumption per unit of gross domestic product (GDP), greater efficiency and structural changes in the economy have reduced energy intensity. From 1950 to 2011, energy intensity in the United States decreased by 58 per cent per real dollar of GDP. Until the 1970s, energy intensity was falling relatively slowly, less than 1 per cent per year.

In 1974, energy prices rose 56 per cent above the previous year as a result of the Arab oil embargo, leading to changes in both national policy, such as the establishment of vehicle efficiency standards, and consumer attitudes. In addition, the role of energy-intensive industries in the United States declined with continuing structural changes in the economy. Since 1973, energy intensity has declined at a rate closer to 2 per cent annually, although with a few noticeable annual increases. EIA projects that this average annual decline of 2 per cent will continue through 2040. The most significant driver of the expected decline will be the transportation sector, with the energy intensity of light-duty vehicles, representing by far the largest energy consuming part of the sector, projected to decline by more than 47 per cent from the 2005 value.

To be sure, the above developments are encouraging. Notwithstanding, from a global perspective, the world’s population continues to grow, and citizens of newly developed economies, mostly in Asia, are rapidly being lifted from poverty to middle class status, enabling them to become consumers, like North Americans and Europeans. Thus, while technology has helped reduce the energy input required to manufacture a unit of production, the greater number of people on the planet and the general rise of prosperity have substantially increased demand for manufactured goods, resulting in ever-growing global levels of greenhouse gases and pollution.