#498. A Different Perspective on ManufacturingPosted on
A Different Perspective on Manufacturing
When we look at manufacturing, we typically look at the number of manufacturing jobs as a gauge on how the sector is doing. A report from 24/7 Wall Street in August looked at manufacturing output as a percentage of GDP (Gross Domestic Product). The information was very encouraging.
This week we will share excerpts from the article, and next week we will look specifically at the 17 states in which Agracel has projects.
Manufacturing accounted for more than 12% of the United States’ GDP in 2013, with output from the sector totaling more than $2 trillion. In some states, manufacturing makes up a far greater share of the local economy. Last year, manufacturing accounted for more than 30% of Indiana’s state GDP, the most in the nation. Using 2013 figures published by the Bureau of Economic Analysis for 2013, 24/7 Wall St. identified the 10 states where manufacturing still matters.
Many of the top manufacturing states are located in the Midwest and the Southeast. In the Midwest, Moutray noted, we see more traditional manufacturing industries such as auto production, airplane production, metals, machinery, plastics and chemicals. The Southeast, he added, offers more of a growth story. “The southeast is a very attractive place to do business,” Chad Moutray, chief economist at the National Association of Manufacturers, said. “Investment is really flowing into the Southeast. And I think that’s really helping to drive a lot of additional manufacturing growth and employment.”
The states with the biggest manufacturing economies specialize in different industries. In Oregon — the state with the second highest share of GDP coming from manufacturing — high-tech manufacturing is especially prominent, Moutray pointed out. Oregon’s computer and electronic product manufacturing industry alone accounted for 23.1%, or $48.6 billion, of the state’s output in 2012. In Louisiana, 9.2% of the state’s 2012 GDP came from petroleum and coal-based product manufacturing.
Consistent auto industry growth in recent years helped drive manufacturing output in several states. Michigan and Indiana, two of the top five states where manufacturing still matters, both depend heavily on auto manufacturing. The states’ motor vehicle sectors generated 7.6% and 5.0% of their total 2012 output, respectively, the two highest auto-industry contributions nationwide.
Other industries are also playing a huge role in manufacturing’s recovery, Moutray noted. These include industries such as machinery and electrical equipment, as well as raw metals and metal products manufacturing. Moutray also cited growth in plastics making, which “speaks to the growth of energy and shale,” since natural gas and petroleum products are used to make plastics.
Many of the states with strong manufacturing industries are able to export large quantities of their products. Seven states were among the 15 top national exporters of manufactured goods in 2012, with exports totaling at least $32 billion per state. These states’ export growth rates since the end of the recession has been among the largest. Michigan and Louisiana in particular have exported around 20% more manufactured goods each year over that period.
Following is the list of the top 10 states where manufacturing still matters, along with their manufacturing share of output:
1. Indiana – 30.1%
2. Oregon – 29.8%
3. Louisiana – 23.4%
4. North Carolina – 20.9%
5. Michigan – 19.0%
6. Wisconsin – 18.9%
7. Kentucky – 18.3%
8. Alabama – 17.8%
9. Ohio – 17.7%
10. South Carolina – 17.3%
Next week we will look at Agracel’s project states.