The States Leading the U.S. Manufacturing Resurgence
Exhibiting know-how and innovation, U.S. manufacturers are adding to their payrolls and
economic growth across the nation. We have identified 19 states where manufacturing is leading the way...
Mark Crawford (Q1 / Winter 2013)
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Manufacturing is Kentucky’s third-largest employment sector — nearly one out of every eight non-agricultural jobs in Kentucky is in manufacturing. In 2012, 232 manufacturing facilities announced new locations or expansions in the state, which will contribute over $2.25 billion in capital investment and create about 6,700 new jobs. One quarter of these new projects are related to the automotive industry, creating nearly one third of all new manufacturing jobs in the state. According to the U.S. Bureau of Labor Statistics, Kentucky gained 1,400 manufacturing jobs from December 2011 to December 2012 — among the most in the nation.
Just a few of Kentucky’s major manufacturing location announcements in 2012 include iwis Engine Systems (German Tier-I automotive plant in Murray), Anchor Packaging (food industry packaging plant in Mount Vernon), Baton LLC (natural stone manufacturer in Louisville), and Birtley (Chinese coal equipment and processing operation in Lexington). Important factors in their site selection decisions were low industrial electricity costs, competitive tax structure, innovative incentive programs, and high quality of life.
“Manufacturing is a crucial sector of our economy, representing about 16.5 percent of Kentucky’s GSP,” says Erik Dunnigan, commissioner for Kentucky’s Department for Business Development. “The diversity of our manufacturing base is also vital to our growth. More than 2,400 manufacturing facilities across Kentucky produce everything from automobiles and aerospace parts to food, beverage, and paper products and everything in between,” Dunnigan continues. “The Commonwealth’s reputation for meeting and exceeding industry needs, and providing companies with a skilled and available work force to meet the demands of a global economy, continues to fuel our manufacturing success.”
Manufacturing accounts for about 25 percent of Louisiana’s GSP, according to NAM. The state has a history of both traditional and advanced manufacturing, especially related to natural resources and energy. Affordable energy is a big reason companies choose Louisiana. Louisiana’s highly developed pipeline infrastructure, combined with an abundant supply of historically low-priced natural gas, makes the state an attractive location for industrial projects.
For example, Maritime International, based in Broussard, is creating 90 new jobs by bringing back production of maritime mooring systems from China. “We can best maintain the benchmark for quality we have set in our industry by enhancing our control over our manufacturing process,” says President David LeBlanc of Maritime International, whose customers include the U.S. Navy and many international ports. “With the support of Louisiana Economic Development, we can bring that technology to our backyard, create quality jobs, and supply a superior product made here in Louisiana.”
In December 2012, representatives of Sasol Ltd. (South Africa) and Louisiana Governor Bobby Jindal announced the largest manufacturing investment in state history — up to $21 billion for an integrated fuel and chemical complex, which may prove to be the largest foreign direct investment in U.S. history. The project will consist of a natural gas-to-liquids (GTL) plant producing premium transportation fuels, with an ethane cracker producing ethylene, which is in high demand in the chemical industry. The project represents the first GTL plant in the United States, 1,253 direct jobs, and almost 6,000 new indirect jobs. At least four other energy projects are in the works.
“Louisiana’s reputation as a low-cost business environment and a critically important energy state opens doors for us,” says Louisiana Economic Development Secretary Stephen Moret. “But what seals many manufacturing deals is our work force development program — LED FastStart — and our targeted incentives that reward job creation, facility modernization, and capital expansions.”
“Michigan is a leader in making things and making things work,” says Governor Rick Snyder. “Very few locations in the world can match our world-leading bases in manufacturing, R&D, engineering, and high-skilled talent. These advantages — combined with the bold reforms we have made to our business climate — are generating new opportunities for manufacturers of all sizes and in all industries.”
For example, business taxes are lower than at any time in decades. The state’s flat 6 percent tax for “C” corporations is among the lowest in the nation and has slashed business costs by 83 percent. According to the Tax Foundation, a nonpartisan tax research group, Michigan’s overall corporate tax ranking is now 12th best in the country. The Michigan Economic Development Corporation also spends $150 million annually in incentives and assistance, along with another $100 million for loan support to small and mid-size businesses.
Durable goods manufacturing output in Michigan increased 41 percent in the past two years, reaching a value of $55.9 billion in 2012. Although a variety of manufacturing industries has contributed to this resurgence, automotive is still king. Michigan is home to more than 370 vehicle-related R&D and technical centers, including research, product development, or production facilities for eight of the 10 largest OEMs, as well as a vast network of automotive suppliers.
Automotive manufacturing is booming: Chrysler plans to hire 1,250 workers and invest $240 million at three Michigan plants so it can ramp up production of its engines and pickups; General Motors is opening a new innovation center in Warren, creating up to 1,500 new jobs; and Ford will create 2,350 hourly jobs and invest $773 million in six Southeast Michigan plants during the next two years.
Mississippi continues to show a positive economic trend, with a 2 percent gain projected for 2013. Manufacturing companies, especially automakers, are key drivers for this economic momentum and employ 12.5 percent of the state’s total non-farm work force, according to the BLS (November 2012).
There have been some recent notable manufacturing business location and expansion announcements in Mississippi. Among these, Comfort Revolution, a developer of high-end sleep products, will locate manufacturing operations in Belmont in Northeast Mississippi, creating 200 new jobs over a three-year period; Nissan North America is expanding its Canton plant to accommodate production of the Nissan Sentra compact vehicle, creating 1,000 new jobs; Von Drehle will locate a paper product manufacturing operation in Natchez, creating 100 jobs; and Signet Maritime, a marine transportation and logistics company, will expand its shipbuilding and repair operations in Pascagoula, creating 50 new jobs.
Sustainable energy — especially biomass — is an emerging industry for Mississippi with high growth potential. The state is rich in biomass resources, largely derived from the wood products and paper industries. Biomass is processed to create a feedstock that can be burned efficiently to generate steam and electricity. Leading private-sector firms continue to invest in biomass research and development in the state. Most recently, British-based Drax Biomass International announced it would construct an $80 million wood pellet production facility in Gloster to provide fuel for its power plant in England.
“With our abundance of biomass resources, Mississippi offers important advantages to businesses that rely on biomass for their operations,” says Brent Christensen, executive director of the Mississippi Development Authority. “Drax Biomass’ decision to locate its plant in Gloster is exciting news for all of Southwest Mississippi.”
Manufacturing remains a key element of the economy in every part of New York — food/beverages, petroleum and coal products, textiles, machinery, and primary metal manufacturing are especially showing strong gains. New York’s strengths — its proximity to markets, skilled work force, and higher education and R&D institutions — continue to make the state an attractive place to do business and capitalize on new advanced manufacturing opportunities.
“Governor Cuomo is committed to growing New York’s manufacturing industry and creating jobs,” indicates Empire State Development (ESD) President and CEO Kenneth Adams. “From investing in traditional manufacturing sectors to advanced manufacturing industries, ESD is focused on making New York State the place to be for manufacturing.”
This includes creating a collaborative environment for high-tech sectors such as semiconductor R&D and manufacturing. The effort is paying off — for example, GLOBALFOUNDRIES plans to build a multibillion-dollar R&D facility at its Fab 8 Campus in Saratoga County in New York’s Capital Region. The Technology Development Center (TDC) is expected to result in at least 500 new, high-paying direct jobs, as well as 500 additional jobs at GLOBALFOUNDRIES Fab and administration buildings.
“This significant expansion demonstrates that the investments we have made in nanotechnology research across New York State are producing the intended return,” says Governor Cuomo. “New York has become the world’s hub for advanced semiconductor research, and now the Technology Development Center will further ensure that the innovations developed in New York, in collaboration with our research institutions, are manufactured in New York.”
Next: North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, Texas and Wisconsin