Manufacturing Needs the Right Policies to Drive Competitiveness

The Ban on Crude Oil Exports Holds Back Manufacturing and the Economy

In partnership with Inforum and the Aspen Institute’s program on Manufacturing and Society in the 21st Century, the MAPI Foundation analyzed how removing the U.S. ban on crude oil exports could add to manufacturing growth by stimulating higher levels of domestic oil production. The two scenarios—a low export case and high export case—assumed levels of exports, production, imports, capital expenditures, and oil prices.

What would the ban’s removal mean for manufacturing? Higher levels of oil production require investment expenditures for capital equipment and construction, in turn raising overall demand for goods. This stimulates the manufacturing sector and its supply and distribution chains. The resulting improvements in income and employment would significantly boost the economy.

Using Inforum’s LIFT model, the report’s researchers forecasted major macroeconomic benefits in the high export scenario, including:

• GDP rising by 0.93% during 2019-2021 before leveling off around 0.74% higher in 2025
• A peak of 630,000 jobs added in 2019
• Real (inflation-adjusted) household income increasing by $2,000 to $3,000 in 2025