The US manufacturing sector owes its standing to Oliver Evans. Not a household name, Mr. Evans built the first automatic flour mill back in 1785. At the time, few would have assumed that factory work in a flour mill would eventually lead to the manufacturing sector accounting for 40% of American jobs at the height of World War II.
Work in manufacturing was traditionally viewed as a path to the middle class. Higher levels of education weren’t required and the pay was above average. Yet, over the past thirty years, manufacturing has taken a hit. The sector has witnessed a precipitous drop from its mid-20th century heights, and some are wondering if the golden years are officially behind us.
As globalization continues to advance, more and more companies have moved offshore, seeking lower costs and thus greater profit margins. Trade deals like NAFTA create more competitors for US producers and technological advances have lessened the need for physical human beings (in support of automized bots) in some industries. Couple this with many industrialized countries encouraging university studies as opposed to trade schools, sectors that traditionally relied on more manual labor are having to contend with declining labor-related interest.
Yet, despite these challenges, the US is a large country and we are witnessing a rebound of sorts in manufacturing’s share of employment in some states. Traditionally, northern states like Pennsylvania and New York were manufacturing hubs. Employment and output have dropped, but it hasn’t disappeared. Rather, other states have picked up the slack.
Take for example Utah. The state posted an impressive 23.2% manufacturing employment growth from 2010 to 2020 and 18.5% manufacturing GDP growth over the same period. In Oregon, the employment growth was lower than in Utah (13.4%), but the Beaver State boasts an impressive manufacturing share of total GDP for the state – 15.4%.
Three decades ago neither state would have been considered a manufacturing hub. So while US manufacturing is certainly nowhere near its World War II level, southern and western US states are advancing the sector forward and providing meaningful employment opportunities for millions of Americans.
State metro areas are categorized as large, medium, and small. San Jose-Sunnyvale-Santa Clara, California is a large metro area and has seen its share of manufacturing GDP growth absolutely balloon by nearly 100% (94.6%) from 2010 to 2020. Nashville-Davidson-Murfreesboro-Franklin, Tennessee is another large metro area that has just arrived to double digits with respect to the state’s manufacturing share of total GDP – 10.3%.
Narrowing down further, midsize metros like Vallejo, California, Reno, Nevada, Fort Collins, Colorado, and Mobile, Alabama are now manufacturing hotbeds. Small metro areas like Lake Charles, Louisiana, Spartanburg, South Carolina, Kankakee, Illinois, and Bellingham, Washington are bringing much-needed employment and growth to their respective communities.
Domestic manufacturing contributes to more resilient supply chains and can be a safety net of sorts when global chains falter. If there’s one thing the COVID-19 pandemic has taught us, the world economy is as integrated as it’s ever been. As such, bolstering a national manufacturing sector could not be more important.
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