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The 'State' of Manufacturing

May 22, 2008
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Manufacturing is still a vital cog in the U.S. economy. But, how individual states ranks when it comes to local gross domestic product may raise a few eyebrows.

While crunching data and analyzing statistics for ASSEMBLY’s 13th annual State of the Profession survey (look for the results in the July issue), I recently came across this optimistic tidbit: Manufacturing is still a vital cog in the U.S. economy. While I’m not entirely surprised to hear it, that kind of news is rather uplifting these days.

According to the Economic Policy Institute (EPI, Washington, DC), the manufacturing sector supported 14 million jobs in 2007, or about 10 percent of total employment. Manufacturers are also responsible for a significant share of U.S. economic production, generating 12 percent of total gross domestic product in 2006.

Because manufacturers also use trillions of dollars worth of commodities and services as inputs, the sector is responsible for an even bigger share of total output. In fact, when measured from that perspective, the Bureau of Economic Analysis (Washington, DC) claims that manufacturing is by far the most important sector of the U.S. economy.

Of course, manufacturing also plays a key part in the economy of many individual states. In some parts of the country, it’s traditionally the backbone of the local economy.

I always assumed that Michigan, Ohio and Pennsylvania would be in the top-3 of any sort of economic ranking of manufacturing (or, for that matter, any credible college football poll). But, I was surprised to see that’s not the case, according to the EPI economists.

Today, manufacturing maintains the largest local footprint in Indiana (28 percent of the state’s GDP), Iowa (21 percent) and, believe it or not, Louisiana (21 percent). Wisconsin is next on the list, followed by North Carolina, Arkansas, Ohio, Kentucky, Alabama and Michigan. In California and Texas, manufacturing generated a smaller share of each state’s GDP (10 percent and 13 percent, respectively), but both of those large states generated more than $100 billion in manufacturing GDP in 2006. .

Surprisingly, none of the three frontrunners in the 2008 presidential race represent one of the top-10 manufacturing states in the U.S. Senate. Here’s how they rank:

  • Illinois (Barack Obama) is 20th on the EPI list.
  • Arizona (John McCain) is 40th.
  • New York (Hillary Clinton) is 43rd.
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