Let's not split hairs. Manufacturing Jobs certainly declined by 35% and output may have declined by a comparable amount. Regardless, that is still a large amount of workers that could be making things that people need. Demand depends on several factors but if people don't have the money to buy cars they will use transit or own one car as a family instead of two. One constraint on demand for manufactured goods is how much money is injected into the economy and how the injection of dollars into the economy are distributed. The primary mechanism of monetary injections into the economy is though the creation of debt (either public or private).
The supposed gains in manufacturing output are likely primarily phantom GDP gains due to gains from trade:
But these gains are not widely shared by the people: