The U.S. manufacturing industry has always been one of the strongest contributors to the national economy, both in terms of employment and goods. This closely watched industry garners a great deal of interest from economists and politicians alike. That’s why the industry’s recent momentum is a noteworthy development. Recent gains in manufacturing employment have been surprisingly strong and are spread throughout the country, not just in the Rust Belt.
Historically, manufacturing employment in the U.S. averaged between 17 million and 18 million people from the mid-1960s to about 2000. Automation, computerization, offshoring, and other factors began reducing the number of manufacturing jobs held in the U.S., with a precipitous drop through the Great Recession that bottomed at about 11.5 million workers by 2010. That was the lowest number of manufacturing jobs held in the U.S. since prior to World War II, when the population was much smaller.
According to the Bureau of Labor Statistics, annual job gain for the manufacturing industry reached 327,000 in July 2018. That is the best annual gain in 23 years. Despite steady and now strong gains in manufacturing since the Great Recession, total employment in the manufacturing industry is still well below the 17 million level at about 12.8 million in July.
It is important to distinguish between the two main sectors of manufacturing goods that are being created – durable and nondurable. Nondurable goods are consumed rather quickly and include food products, fuel, paper products and other personal products. Employment in firms creating durable goods encompass jobs producing things like cars, refrigerators, computers and other machinery.
Employment and job gains in nondurable goods manufacturing has been pretty steady over the years, with about 64,000 jobs added annually since 2015. The real action has been in the durable goods sector, which has seen employment gains go from slightly negative in 2016 to more than 260,000 in July.
Several of the durable goods subsectors are contributing to these strong gains in the 12 months ending July 2018. They include:
- Fabricated metal products (+63,200 jobs)
- Machinery (+50,200 jobs)
- Computer and Electronics (+29,900 jobs)
- Electrical Equipment and Appliances (+17,200 jobs)
- Transportation Equipment (which saw a recent spike of +67,200 jobs from 34,200 in June)
The next big question is, where are these manufacturing jobs going?
The following table shows the top 25 metropolitan statistical areas ranked by annual percent growth in manufacturing employment with annual gains of at least 1,000 jobs and annual growth of at least 4.8% through July 2018. The list includes metros both big and small, with a preponderance of smaller metros (under 300,000 total employment) as their smaller employment base provides larger percent increases.
Generally, the top 25 manufacturing jobs gainers are metros that already devote a large share of their local economy to manufacturing. Manufacturing employment in the U.S. comprises 8.6% of total non-agricultural employment. The average for these top 25 is 7.7%. But if excluding the large, non-industrial metros like Miami, Orlando, Phoenix and Las Vegas, the average rises to 12.1% (including Cleveland).
A few large metros with 1 million-plus total employment made the top 25 manufacturing job gain list, with Miami-Fort Lauderdale-West Palm Beach and Orlando falling in the top 10. Phoenix, Las Vegas and Cleveland also landed in the top 25.
Each of the larger metros in the top 25 have relatively diverse manufacturing economies, with the exception of Las Vegas. Las Vegas, with the smallest share of employment devoted to manufacturing on the list (2.4%), created about 1,300 manufacturing jobs last year, primarily in durable goods. The nondurable goods category of food processing has long been the dominant manufacturing sector in Las Vegas and currently employs more now than 10 years ago, while durable goods employment is still less than it was in 2008.
Eight of the top 10 metros have total employment below 300,000 workers. They average about 20% of their total employment in the manufacturing industry, almost three times the national norm. Two top 10 metros – Kokomo, IN and Elkhart, IN – devote 30% to 50% of their total employment to manufacturing. The resurgence of automobile and recreational vehicle manufacturing is bolstering these industrial areas, as well as in Ann Arbor, MI.
Other industries generating jobs for these smaller top 10 metros include electric boat or submarine manufacturing (Norwich, CT) and batteries for electric cars (Reno). A few of the top manufacturing job gainers – Yakima, WA, Merced, CA, and Sioux City, IA – are primarily food processing centers, contributing more to the nondurable goods manufacturing gain.