#56 – Inside Our Industry – Top Cities Where U.S. Manufacturing Is Thriving
Posted on | Inside Our Industry
Even though this study was done pre-COVID, we are excited to see that the Midwest and South are still thriving manufacturing regions. And congrats to our neighbor to the east, Indiana, for having the top 2 thriving manufacturing cities – Elkhart and Columbus!
Top Cities Where U.S. Manufacturing Is Thriving
AdvisorSmith | Patrick Chen | June 28, 2021
Manufacturing has served an important role in the U.S. economy, and the industry continues to play a critical role today. From industrial products to consumer goods, and from automobiles to aircraft, the U.S. manufacturing sector is diverse and continues to develop and evolve. In this deep dive into manufacturing-centric areas in the U.S., we examined the question: where are the top cities in the United States where manufacturing is thriving?
AdvisorSmith conducted a study on 294 U.S. cities to determine the top cities where U.S. manufacturing is thriving. We based our rankings on four key economic factors: manufacturing output growth rate, manufacturing output per capita, manufacturing location quotient, and manufacturing employment growth rate.
In 2019, there were 12.8 million manufacturing jobs in the United States, up from 12.3 million in 2015. Manufacturing jobs accounted for 8.2% of total employment, and manufacturing output was $2.4 trillion in 2019. Manufacturing accounted for approximately 11% of GDP. Nationwide, we found that manufacturing output per capita was approximately $7,221, while the manufacturing output growth rate on a compounded annual growth rate basis was 2.9% during the study period. Manufacturing employment grew by a compounded annual growth rate of 0.9% during the study period.
Geographically, the Midwest accounted for 26 out of the top 50 cities, while the South accounted for 13. Western cities accounted for 9 of the top 50, while only 2 Northeastern cities only accounted for 2 of the top 50, with both in Pennsylvania. Regional patterns emerged with the Midwestern cities primarily focused on automotive, agricultural, and raw materials manufacturing while the South maintained strong oil and gas, chemical, and furniture industries.
Top Cities Where Manufacturing Is Thriving by City Size
The majority of the top cities for manufacturing in our study—43 in the top 50, and 9 in the top 10—were small and midsize cities. Small cities with a powerful hold on significant manufacturing industries dominated our list, and Indiana, with 3 out of the top 10 spots, had a particularly strong showing at the top of our ranking.
We segmented cities by metropolitan statistical area population, with small (<150,000 population), midsize (population between 150,000 and 500,000), and large (over 500,000 population) cities. Below are the top 10 small, midsize, and large cities where manufacturing is booming.
Top Cities Where Manufacturing is Thriving
1. Elkhart, IN
Elkhart, Indiana, was the top manufacturing city in our study, and one of two midsize cities in the top five. Elkhart is a city in northern Indiana just fifteen miles east of South Bend, the economic and cultural center of Northern Indiana. Elkhart and the surrounding cities in Elkhart County are referred to as the “RV capital of the world.” Fifty-two percent of all RVs produced in the United States are produced in Elkhart County.
In 2019, the city produced 584% more jobs for manufacturing, on a per-capita basis, than the average U.S. city and had a manufacturing output of $9.1 billion. During the study period, manufacturing output grew by a compounded annual growth rate of 6.1%, while manufacturing employment grew by 2.1%. Manufacturing output per capita in Elkhart was $44,137 at the end of the study period.
2. Columbus, IN
Columbus is a small city in central Indiana located approximately 40 miles south of the state capital, Indianapolis. Columbus is one of the biggest manufacturing cities in the nation, as 38% of the people who work in Columbus work in the manufacturing industry. Columbus is particularly well known as a producer of automotive engines, and this is, in no small part, due to the city serving as the headquarters of Cummins, a Fortune 500 corporation that designs, manufactures, and distributes engines. Columbus is also home to Toyota Material Handling, U.S.A., Inc., which is the world’s largest manufacturer of forklifts.
Columbus had a manufacturing output of $3.9 billion in 2019, which was $45,901 per capita. The city has 459% more manufacturing jobs than the national average on a per-capita basis and had a manufacturing output growth rate of 1.1% during the study period. Manufacturing employment also grew 0.8% over the same period.
3. Reno, NV
Reno is a city in the northwestern part of Nevada, located near the California border. The city is best known for casinos and tourism, serving both the gaming industry and the nearby ski resorts of Lake Tahoe. Recently, the Reno economy has attracted major investments from technology companies based in California and Washington, such as Amazon and Google. Most importantly for the manufacturing industry is the location of the Tesla gigafactory in Reno. This electric vehicle battery manufacturing plant has led to rapid growth in manufacturing output and manufacturing jobs in Reno.
The manufacturing output of Reno was $3.4 billion in 2019, which was $7,054 on a per-capita basis. Manufacturing output grew by 15.3% annualized over the study period. The city also has 124% more manufacturing jobs than the national average.