Conventional wisdom for a generation has been that manufacturing in America is dying. Yet over the past five years, the country has experienced something of an industrial renaissance. We may be far from replacing the 3 million industrial jobs lost in the recession, but the economy has added over 330,000 industrial jobs since 2010, with output growing at the fastest pace since the 1990s.
Looking across the country, it is clear that industrial expansion has been a key element in boosting some of our most successful local economies. The large metro areas with the most momentum in expanding their manufacturing sectors also rank highly on our list of the cities that are generating the most jobs overall, including Houston-Sugarland-Baytown, Texas, which places first on our list of the big metro areas that are creating the most manufacturing jobs; Seattle-Bellevue-Everett, Wash. (third); Oklahoma City, Okla. (fourth), Nashville-Davidson-Murfreesboro-Franklin, Tenn. (No. 6); Ft. Worth, Texas (No. 9); and Salt Lake City, Utah (No. 10).
Our rankings factor in manufacturing employment growth over the long-term (2001-12), mid-term (2007-12) and the last two years, as well as momentum. They identify those places where the market tells us the best storylines for manufacturing are being written.
Best Cities for Manufacturing Jobs
The Energy Boom and Industrial Growth
What is striking about this revival is both its sectoral and geographic diversity. For Houston, the booming energy industry is driving job growth in metal fabrication, machinery and chemicals. Since 2009, Houston industrial employment has grown 15%, almost three times as fast as the overall economy. Of course, industrial growth also tends to create jobs in other sectors, notably construction and professional and business services.
Much the same pattern of energy-driven growth can be seen in Oklahoma City, where the number of industrial jobs is also up 15% since 2009. This dynamic is also occurring in smaller metro areas. Energy cities did particularly well on our ranking of mid-sized metro areas (those with between 150,000 and 450,000 jobs overall), including third-place Lafayette, La.; Tulsa, Okla (fifth); Anchorage (sixth); Baton Rouge, La. (eighth); Bakersfield-Delano, Calif. (No. 13); and Beaumont-Port Arthur, Texas (No. 14).
On our small cities list (under 150,000 jobs), two energy cities stand out, No. 4 Odessa and No. 7 Midland.
The Great Lakes Revival
The other big story in manufacturing has been the recovery of the auto industry. Essentially we see two parallel expansions, one based around the revival of U.S. automakers and their suppliers, particularly around the Great Lakes, and another that’s keyed by foreign-based firms, particularly in the Mid-South and Southeast.
Among the larger metro areas, the star of the U.S.-led recovery is No. 5 Warren-Troy-Farmington Hills, Mich., an area that is widely known as “automation alley.” This region epitomizes the transition of manufacturing to more automated, high-tech production methods. After decades of losses, the area’s industrial employment increased 26% from 2009 through 2012.
More hopeful still has been the industrial recovery of the quintessential factory region, Detroit-Livonia-Dearborn, No. 8 on our large metro area list. The Detroit resurgence is for real, with manufacturing employment up 18% since 2009. The industrial expansion has also sparked high-tech employment growth across Michigan that in 2010-2011 stood at almost 7% compared to 2.6% nationwide.
Another big winner from the auto rebound has been Louisville-Jefferson County, Ky., No. 2 on our large cities list. Industrial employment in the area has expanded nearly 15% since 2009. Smaller cities in the region have also staged an impressive recovery. Columbus, Ind., No. 1 on our small city list, is benefiting from the growth of auto suppliers such as PMG Group as well as the expansion of a nearby Honda facility.
The South Rises Again
Many “progressive” intellectuals love to hate the South. The region, industrializing rapidly for decades, took a big hit when the recession devastated the manufacturing sector everywhere.
But more recently many Southern areas have enjoyed considerable growth in a host of industries, from petrochemicals and autos to aerospace. This can be seen in two of the South’s largest metropolitan regions, Nashville, Tenn. (No. 6 on our list), and Virginia Beach, Va. (No. 7 ). In Nashville, much of the manufacturing job growth is auto-related, sparked in large part by the expansion of smaller plants and the nearby Nissan facilities.
In contrast, Virginia Beach’s manufacturing job growth has been very diverse, reaching into fields as broad as fabricated metals and autos. Expanding investment from abroad, notably in aerospace and autos, has paced growth in other southern cities, notably Mobile, Ala., No. 1 in the mid-sized category, which has become a major production hub for Europe-based Airbus. Similarly, in Florence-Muscle Shoals, Ala., No. 3 on our small city list, industrial employment growth has been paced by the expansion of Navistar, as well as a host of smaller specialized manufacturers.
Western Movement
The West is often identified as a key high-tech and lifestyle mecca, but it also includes some of the nation’s top industrial growth centers. At the top of the pile sits No. 3 Seattle-Bellevue-Everett, home to Microsoft, Amazon and Starbucks SBUX, but also the birthplace of Boeing and its primary manufacturing location. Although the aerospace giant has moved some production elsewhere, Seattle has enjoyed nearly 13% growth in manufacturing employment since 2009.
But the Emerald City is not the only western hotspot for manufacturing growth. Aided by low hydro-electric energy prices — as much as a third less than historic rival California –Washington State boasts several thriving industrial areas. Kennewick-Pasco-Richland earned the No. 2 spot in our small city rankings while Wenatchee comes in at No. 11. Low energy prices helps attract firms in diverse industries ranging from metals to food processing.
The other western manufacturing hotspot is Utah, which also has low energy prices and a favorable business climate. Salt Lake City, which is becoming a perennial on many of our lists, has enjoyed a rapid expansion of technology-driven manufacturing, most notably a huge Intel-Micron flash memory plant, aerospace and recreation sports equipment industries. Also in the Beehive State, Ogden-Clearfield ranks No. 8 on our mid-sized list.
Who’s Losing Ground?
The bottom of our list generally divides into two categories: long-declining industrial hubs and places that are starting to de-industrialize rapidly. In many ways California represents the antithesis of the other western manufacturing economies, with its lethal combination of high energy prices and strict regulation. According to the California Manufacturing and Technology Association, the Golden State lost a full third of its industrial base from 2001 to 2010, and has yet to participate in the nation’s industrial recovery. Since 2010, manufacturing employment nationwide has grown more than 4% while in California industrial jobs have barely grown.
With the exception of oil-rich Bakersfield, no California metro area approaches the top rungs of our manufacturing list. Most worrisome is the poor performance of Los Angeles-Long Beach, which ranked 46th out of 66 large metro areas. Still the nation’s largest manufacturing region, L.A. has lost some 4.7% of its industrial jobs since 2010, declining as the nation’s factory economy surged forward. Doing even worse is neighboring San Bernardino-Riverside, traditionally where L.A. firms expand, ranking a dismal 64th.
But not all the bad news is in California. The most poorly performing manufacturing metro areas include such old industrial hubs as Camden-Union, rock bottom at No. 66, which has lost 7% of its manufacturing jobs since 2009 and a remarkable 23% since 2007. Both No. 62 Newark-Union, N.J., and No. 56 Rochester, N.Y., are also rapidly becoming industrial has-beens.
Clearly America’s nascent industrial revival still has not reached many parts of the country. But given the evident relationship between growing economies generally and a vibrant manufacturing sector, perhaps more regions will place greater emphasis on industrial employment as they seek to recover from the Great Recession.
Best Cities for Manufacturing Jobs
| 2013 Mfg Rank – Large MSAs | Area | 2013 Weighted MFG INDEX | 2012 MFG Employment (1000s) | 2012 Mfg Rank – Large MSAs | 2013 Mfg Rank Change from 2012 |
| 1 | Houston-Sugar Land-Baytown, TX | 87.1 | 248.3 | 4 | 3 |
| 2 | Louisville-Jefferson County, KY-IN | 82.2 | 72.5 | 47 | 45 |
| 3 | Seattle-Bellevue-Everett, WA Metropolitan Division | 80.4 | 169.9 | 1 | (2) |
| 4 | Oklahoma City, OK | 79.1 | 35.6 | 2 | (2) |
| 5 | Warren-Troy-Farmington Hills, MI Metropolitan Division | 77.2 | 143.3 | 5 | 0 |
| 6 | Nashville-Davidson–Murfreesboro–Franklin, TN | 75.7 | 70.4 | 48 | 42 |
| 7 | Virginia Beach-Norfolk-Newport News, VA-NC | 75.4 | 55.1 | 33 | 26 |
| 8 | Detroit-Livonia-Dearborn, MI Metropolitan Division | 71.0 | 80.4 | 24 | 16 |
| 9 | Fort Worth-Arlington, TX Metropolitan Division | 70.1 | 92.8 | 9 | 0 |
| 10 | Salt Lake City, UT | 67.8 | 55.7 | 3 | (7) |
| 11 | San Antonio-New Braunfels, TX | 64.9 | 47.0 | 7 | (4) |
| 12 | Birmingham-Hoover, AL | 64.5 | 37.5 | 46 | 34 |
| 13 | Charlotte-Gastonia-Rock Hill, NC-SC | 64.3 | 71.0 | 22 | 9 |
| 14 | Milwaukee-Waukesha-West Allis, WI | 59.5 | 119.5 | 10 | (4) |
| 15 | Minneapolis-St. Paul-Bloomington, MN-WI | 59.2 | 181.5 | 15 | 0 |
| 16 | Austin-Round Rock-San Marcos, TX | 59.2 | 51.1 | 8 | (8) |
| 17 | Fort Lauderdale-Pompano Beach-Deerfield Beach, FL Metropolitan Division | 58.0 | 26.7 | 16 | (1) |
| 18 | San Jose-Sunnyvale-Santa Clara, CA | 57.7 | 156.5 | 11 | (7) |
| 19 | Omaha-Council Bluffs, NE-IA | 57.4 | 31.6 | 14 | (5) |
| 20 | Santa Ana-Anaheim-Irvine, CA Metropolitan Division | 56.9 | 158.0 | 20 | 0 |
| 21 | Phoenix-Mesa-Glendale, AZ | 56.6 | 117.8 | 43 | 22 |
| 22 | Denver-Aurora-Broomfield, CO | 56.3 | 63.4 | 34 | 12 |
| 23 | Indianapolis-Carmel, IN | 55.3 | 83.7 | 50 | 27 |
| 24 | Portland-Vancouver-Hillsboro, OR-WA | 54.8 | 114.7 | 19 | (5) |
| 25 | Cincinnati-Middletown, OH-KY-IN | 54.7 | 106.0 | 6 | (19) |
| 26 | Pittsburgh, PA | 54.1 | 89.3 | 28 | 2 |
| 27 | Cleveland-Elyria-Mentor, OH | 53.9 | 122.4 | 18 | (9) |
| 28 | Columbus, OH | 53.0 | 65.6 | 21 | (7) |
| 29 | Sacramento–Arden-Arcade–Roseville, CA | 52.6 | 34.1 | 57 | 28 |
| 30 | San Diego-Carlsbad-San Marcos, CA | 52.5 | 93.1 | 29 | (1) |
| 31 | Honolulu, HI | 52.4 | 10.8 | 36 | 5 |
| 32 | Atlanta-Sandy Springs-Marietta, GA | 51.6 | 148.8 | 25 | (7) |
| 33 | Raleigh-Cary, NC | 51.2 | 27.2 | 45 | 12 |
| 34 | Chicago-Joliet-Naperville, IL Metropolitan Division | 50.9 | 324.7 | 26 | (8) |
| 35 | Nassau-Suffolk, NY Metropolitan Division | 49.3 | 73.4 | 35 | 0 |
| 36 | Buffalo-Niagara Falls, NY | 49.0 | 50.9 | 12 | (24) |
| 37 | Jacksonville, FL | 47.6 | 28.0 | 53 | 16 |
| 38 | Boston-Cambridge-Quincy, MA NECTA Division | 47.2 | 91.5 | 23 | (15) |
| 39 | Hartford-West Hartford-East Hartford, CT NECTA | 46.7 | 56.8 | 27 | (12) |
| 40 | Bergen-Hudson-Passaic, NJ | 46.5 | 60.2 | 17 | (23) |
| 41 | San Francisco-San Mateo-Redwood City, CA Metropolitan Division | 44.9 | 36.2 | 37 | (4) |
| 42 | Oakland-Fremont-Hayward, CA Metropolitan Division | 43.5 | 79.9 | 44 | 2 |
| 43 | St. Louis, MO-IL | 42.0 | 109.0 | 31 | (12) |
| 44 | Providence-Fall River-Warwick, RI-MA NECTA | 41.6 | 50.8 | 36 | (8) |
| 45 | Dallas-Plano-Irving, TX Metropolitan Division | 40.9 | 164.2 | 30 | (15) |
| 46 | Los Angeles-Long Beach-Glendale, CA Metropolitan Division | 40.8 | 362.7 | 49 | 3 |
| 47 | Memphis, TN-MS-AR | 40.2 | 43.7 | 42 | (5) |
| 48 | Las Vegas-Paradise, NV | 39.0 | 20.2 | 51 | 3 |
| 49 | Orlando-Kissimmee-Sanford, FL | 38.7 | 37.7 | 40 | (9) |
| 50 | Philadelphia City, PA | 38.6 | 23.1 | 55 | 5 |
| 51 | West Palm Beach-Boca Raton-Boynton Beach, FL Metropolitan Division | 37.1 | 15.2 | 56 | 5 |
| 52 | New York City, NY | 35.7 | 75.2 | 58 | 6 |
| 53 | Edison-New Brunswick, NJ Metropolitan Division | 34.0 | 58.4 | 64 | 11 |
| 54 | Richmond, VA | 33.9 | 31.9 | 65 | 11 |
| 55 | Tampa-St. Petersburg-Clearwater, FL | 33.3 | 58.9 | 41 | (14) |
| 56 | Rochester, NY | 32.9 | 57.9 | 32 | (24) |
| 57 | New Orleans-Metairie-Kenner, LA | 32.1 | 29.8 | 38 | (19) |
| 58 | Northern Virginia, VA | 30.7 | 21.9 | 39 | (19) |
| 59 | Bethesda-Rockville-Frederick, MD Metropolitan Division | 30.5 | 15.8 | 54 | (5) |
| 60 | Kansas City, MO | 29.6 | 37.8 | 13 | (47) |
| 61 | Putnam-Rockland-Westchester, NY | 27.7 | 24.5 | 63 | 2 |
| 62 | Newark-Union, NJ-PA Metropolitan Division | 27.5 | 63.4 | 52 | (10) |
| 63 | Miami-Miami Beach-Kendall, FL Metropolitan Division | 26.8 | 35.0 | 59 | (4) |
| 64 | Riverside-San Bernardino-Ontario, CA | 25.5 | 86.4 | 62 | (2) |
| 65 | Washington-Arlington-Alexandria, DC-VA-MD-WV Metropolitan Division | 24.6 | 32.0 | 61 | (4) |
| 66 | Camden, NJ Metropolitan Division | 21.9 | 35.3 | 60 | (6) |
Manufacturing rankings by Michael Shires.
Joel Kotkin is executive editor of NewGeography.com and a distinguished presidential fellow in urban futures at Chapman University, and a member of the editorial board of the Orange County Register. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.
Michael Shires, Ph.D. is a professor at Pepperdine University School of Public Policy.
This piece originally appeared at Forbes.com.
Comments
5 responses to “America’s New Manufacturing Boomtowns”
The biggest thing keeping companies from making things here in the US.
Tax Codes.
Until that changes, the threat of outsourcing outside the US remains.
Also manufacturing will never return to dense urban areas either. High ceiling, huge sized, single level, good interstate highway access (along with a good local business climate) is the only game in town. So mostly suburban and exurban areas for the most part.
Absolutely correct. The British STILL haven’t “got it” – they can lament all they like about the collapse of manufacturing, but “containing urban growth” and preserving “the green and pleasant land” as the “Town and Country Planning system” has been since 1947, merely means that the more land intensive an “urban” employment sector is, the less likely it is to survive. And the cost of housing is a workforce cost factor.
The USA’s cities that have lost manufacturing for whatever reasons, stand a good chance of gaining something as their urban land costs have fallen to dirt cheap levels. The planning system in the UK means that urban land costs are higher even in an economic disaster city, than they are in a prosperous non-growth-contained city in the USA, let alone a city like Detroit.
Tax reform would lift the trajectory of the US manufacturing revival up another notch.
Tax policy might help manufacturing a bit at the margin, but the fact is that as long as it is far cheaper to run a factory abroad as it is in the US, there is a huge incentive for companies to move manufacturing offshore. The average manufacturing wage in China is something like $300/month. There is simply no way to retain those jobs in the US if you can get somebody to do the same work in China and ship the product to the US for a fraction of the cost of producing the same product here. Tax breaks don’t fundamentally change that equation.
There are literally 40% fewer manufacturing jobs today than there were a decade ago. Something like 6 million manufacturing jobs left the US between 2000 and 2010. So, it’s nice to imagine how great it would be if manufacturing were to come back, but the reality is the economy has changed enormously to where it is much diminished in importance. At least, it is not clear that there this “evident relationship between growing economies generally and a vibrant manufacturing sector”–because generally the US economy has grown enormously over the last several decades while manufacturing has shriveled to a vestige of its former significance. There are now more US jobs in “accommodation and food services” than there are in the manufacturing sector.
Yes, but every economy, whether national economy or urban economy, has to have “primary income” if it is to be able to pay for anything from outside the economy. It is not possible to keep borrowing money to make up a gap between primary income and outflows of money to pay for goods etc from outside the economy, forever. Ultimately, exchange rate movements – at the international level – have to force some changes in the location of “primary” industry and income sources.
At the level of cities, there is not an individual currency which adjusts to reflect these imbalances – but consider the difference between Greece and Germany under conditions of a common currency. This kind of difference also occurs between cities in the same country, depending on the cities different policies and endowments.
It does make a difference between which cities and countries will experience a return of primary income sectors in their urban economies (especially manufacturing) as the world economy re-balances, whether they have lower or higher urban land costs and lower or higher workforce housing cost pressures. And the amount of employment that a local economy will have in “services” and “consumption” is affected very much by how much discretionary income is left in the local economy after households mortgage payments have been taken out.
“The Flow of Money and Its Impact on Local Economies” by William Fruth should be compulsory reading for any politician at any level before they are allowed to even stand for election, and certainly should be compulsory reading for urban planners.
http://www.policom.com/PDFs/FLOW%20OF%20MONEY%202013.pdf
I keep insisting that more attention be paid to the UK economy, and what urban planning and grossly inflated urban land costs have done to its economy. At the opposite extreme, we can see what relative market freedom in urban development and low urban land costs have done for “America’s Growth Corridors”.
California Industrial Space is the story of two prominent markets: manufacturing and warehousing. The SoCal Industrial Real Estate Blog observes that Los Angeles covers the gamut. Orange County, San Francisco, East Bay and Silicon Valley are proportionately more manufacturing. The Inland Empire is proportionately more warehousing.
Best….
Jodi Summers
The SoCal Investment Real Estate Group
Sotheby’s International Realty
jodi@jodisummers.com
http://www.SoCalIndustrialRealEstateBlog.com
License # – 01343854
**
Patience and perseverance have a magical effect before which difficulties disappear and obstacles vanish. – John Quincy Adams