How did World War II influence the spike in manufacturing?

Post World War II, the world saw a massive economic spike. This can be attributed to increased demand for products, new technologies, and global sociopolitical factors. A major part of that was an increase in manufacturing production throughout the world, and most notably in the U.S., France, West Germany, Italy, and Japan.

Pre-war conditions

Before WWII (and after WWI), the world was going through a depression. The Great Depression had increased unemployment in the United States to 25%, and other nations were suffering as well.

This economic depression had left factories empty, which set the stage for the resurgence in production during and after WWII.

The United States saw an incredible economic shift after the war. Some of the factors that contributed to increases in production included the following:

Increased demand

During the war, there was increased demand from businesses to manufacture supplies for the war effort. Factories filled up, and production skyrocketed. Between 1939 and 1944, the nation’s gross domestic product increased by roughly 8% each year.

Wealth redistribution

Progressive tax rates were introduced during the war to enable government investment in the war effort. After the war was over, that tax structure persisted, and the government invested in numerous projects, such as the Interstate Highway System in 1956.

Increased standard of living during World War 2

Easier access to new technologies and property led to the expansion of the middle class. People lived in greater comfort, purchased more goods, and thereby supported production throughout the nation.

World War 2’s global impact on technology

Naturally, the war’s impact extends well beyond the United States. Many of the advances in technology and production seen in the U.S. were also seen in Europe and Japan, causing increases in industrial production.

Cooperation between nations

The spike in manufacturing was also helped by the increased cooperation seen among nations. Several countries formed the European Coal and Steel Community (ECSC), which helped facilitate modernization and reduced costs to its members.

The ECSC was the foundation for the United Nations, which formed later on.

Other factors

Additional factors that affected production include:

• Lower oil prices, facilitating the switch from coal to fossil fuels
• Financial repression, which affected interest rates and affordability
• Depopulation, which freed up resources and lowered the prices of commodities

Summary

Ultimately, the spike in manufacturing after the war resulted from:

• Increased demand
• New products
• Changes in government policies
• Global economic factors
• International cooperation

That spike lasted until the 1970s, and it has affected manufacturing to this day.