A little over a decade after the last major economic decline, and depending on who you talk to, or where you live, the United States’ economy today is either struggling or thriving. However, most critics and observers agree that the major yardstick to gauge the health of our economy remains our Manufacturing sector. Across the globe, the United States has long been viewed as the leading producer of raw materials and products for domestic and import purposes. As the second decade of this Century comes to a close, here is a brief overview of American manufacturing, as well as the industries and regions that are sustaining, even posting gains.

But first, a little backstory: The Bureau of Economic Analysis recently reported that for the first quarter of 2018, manufacturing output in the U.S. reached an all-time record high of more than $2 trillion. That was actually the third quarter in a row (beginning in 2017:Q3) that U.S.Manufacturing reached record-high levels, surpassing the previous record-high level of U.S. factory output established back in 2007:Q3. That was before America’s and other countries’ manufacturing sectors were impacted by the Recession.

We all know, despite the views from numerous brokers on Wall Street and elsewhere, that the only finances and economic outlook that matters is yours. Since it is clear that Manufacturers wield the power and influence over so many of us, what is and where does the current state of Manufacturing leave most Americans? Again, depending on the reference, while there are possibly as much as 13% fewer jobs in the Manufacturing sector today than there had been in 2007, productivity has increased exponentially. This is due to numerous industries coming on line that have incorporated the latest technological advances, such as robotics into their processes.

A Wide Range of Industries

These industries, which range from automotive to pharmaceuticals, from delicate and precise calibration equipment and gages, to pianos, to giant earth movers, require fewer workers to produce greater output with greater accuracy and quality control. However, the demand for these technologies has shifted employment opportunities to these Manufacturing sectors. The need for more skilled workers has increased enrollment at brick and mortar colleges and universities as well as online schools.

There has always been strength in numbers. The aging of the largest population segment, the Boomers, has expanded the need for medical facilities, hospitals, practitioners, and specialized medical equipment. Review that last sentence and you’ll see just how much influence Manufacturing has on that scenario’s successful outcomes!

Numbers do not lie. If you have a hard time accepting the analogy laid out in the previous paragraphs, chew on this: Over the past five years the American Manufacturing sector has employed 12 million workers. But more importantly, it generated an additional 17.1 million indirect jobs. That figure makes Manufacturing the largest multiplier of any economic sector since each dollar’s worth of manufactured goods generates $1.40 in output from other sectors of the economy.

Perhaps most important Manufacturing metric may be the higher wages it provides for blue-collar (skilled but not educated) workers. According to recent Bureau of Labor Statistics data, jobs at goods-producing industries pay an average of $56,799 a year on average which is significantly more than other working-class fields like healthcare and education (averaging $45,676 annually) and leisure and hospitality ($20,879). Oh now you wish you had taken shop class in high school!

Another recent study of almost 400 cities, towns, and regions in the United States has helped to pinpoint where U.S. Manufacturing is thriving today.

  • According to Moody’s Analytics, the San Francisco, CA area experienced the biggest gain in jobs and household income as a result, which surged by almost 14%. Industries are largely technology,engineering, and construction.
  • San Jose, CA, which is part of Silicon Valley, enjoyed the second-largest job/income increases, at about 13% percent
  • Technology positions influenced population increases in Austin, TX, where the jobs/income rose about 9%.

Where the Manufacturing Jobs Have Gone

What is interesting to note about the cities cited above is that two of them are not part of regional ‘tech hubs’ but off shoots. And where the jobs go, people seeking employment opportunities soon follow.

  • The majority of U.S. cities/regions with the largest job/income gains are “tech hubs,” with concentrations of software architects, data analysts and cloud-computing engineers. These include: Denver, CO, Portland, OR, Provo, UT, and Raleigh, NC.
  • Pittsburgh, PA realized a 6% gain in jobs/income thanks to increased technology and health care jobs.
  • Oklahoma City, OK, where job/income are up by 5%, has benefited from oil and gas production, manufacturing, and refineries.
  • FLA/USA: The state of Florida is booming thanks to ever-growing aerospace, aeronautics, and technology sectors that include NASA and Elon Musk’s SpaceX. And let’s not forget the hospitality industry’s inroads in and around the Orlando area. ‘Something to do with a mouse, the future…and now Hogwarts!

In a sad grace note of personal interest to this author, Rochester NY, which at one time led the nation in Manufacturing jobs/income placed at 70 in the top 100 manufacturing cities in the U.S.. This tumble can be traced to the loss of Eastman Kodak, the largest employer in the region. It also speaks to the rise of jobs and income increases elsewhere in the nation that are served by at least two major and different manufacturing industries. One trick pony towns, take note!

Historically, oppression has either destroyed empires or created diamonds. From this most recent economic downturn, we’ve seen that some long-time Manufacturing industry leaders fell by the wayside. Their loss negatively-impacted that region whose citizens either moved to another industry or out of the region entirely. These new industries were not like those they replaced. Instead, technology replaced old-time Manufacturing processes. The need for this technology created jobs elsewhere which boosted their associated regions associated. And so it goes. By remaining flexible and not only open to, but by embracing change, our Manufacturers, the American economy, and our Nation advances.