The United States has a long and distinguished history of automotive manufacturing. Historically, the production of automobiles and auto parts have moved hand in hand in the United States. Although automobile production is the second largest sector of the U.S. manufacturing industry, the parts industry provides many more jobs. There are approximately 1.6 million jobs related directly and indirectly to the components industry (Wething, 2012). In light of the substantial globalization of the market, potential capital investment by component manufacturers must be based on a solid analysis of applicable macroeconomic drivers such as: gross domestic product (GDP) growth rate, business cycle, fiscal and monetary policy , respective effects of such policies on unemployment and interest rates, influence of international trade and demographics. The purpose of this analysis is to identify the relative impact of macroeconomic variables on the components manufacturing industry, and in particular the effects on manufacturers considering capital expansion. The following research on macroeconomic variables and subsequent recommendations provide the basis for an informed decision by manufacturers whether to pursue contemplated operational expansion. The automotive and component industries are crucial sectors of America's manufacturing base. A typical year shows that the automotive industry contributes around 3-5% to our GDP. The components industry individually accounted for 2.4% of GDP in 1997 and 1.4% of GDP in 2010 (Office of Transportation and Machinery, 2011). Furthermore, the automotive and component industries are consumer industries that use raw materials and products from other manufacturers. The numbers above fail to identify the...... middle of the document ......a.edu: www.ibrc.indiana.edu/ibr/2010/spring/article2.htmlOffice of Transportation and Machinery. (2011). International Trade Administration. Retrieved June 10, 2014, from the United States Department of Commerce: trade.gov/static/2011Parts.pdfU.S. Bureau of Labor Statistics. (2014, April). Automotive Industry: Employment, Earnings and Hours. Retrieved June 3, 2014, from www.bls.gov: www.bls.gov/iag/tgs/iagauto.htmU.S. Treasury Department. (2014, January 10). Financial stability. Retrieved June 8, 2014, from www.treasury.gov: www.treaasury.gov/initiatives/financial-stability/TARP-Programs/automotive-programs/Pages/default.aspxWething, R. E. (2012, January 31). Jobs in the U.S. auto parts industry are at risk due to unfairly subsidized and traded Chinese parts. Retrieved June 4, 2014, from www.epi.org: www.epi.org/publication/bp336-us-china-auto-parts-industry/