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Is US Manufacturing Finally Getting Back to Work?

Wednesday, August 29, 2012 15:32
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(Before It's News)

From time to time we like to blog about the manufacturing sector (see here, here, and here). This is because manufacturing has a huge impact on job and income formation and, due to very high multiplier effects, tends to be a significant player when we talk local economic development.

Just last week, several sources wrote about how U.S. manufacturing is actually performing quite well when compared to China and Europe. You can read those articles here and here.

To get a better handle on the bright spots, we looked deep into our most recent dataset to see what stands out. We used all the manufacturing sub-sectors (as classified by four-digit NAICS) and filtered for those sectors with the most job growth and total new jobs since 2009. The industries that rose to the top were motor vehicle parts manufacturing (NAICS 3363), machine shops (NAICS 3327), and agriculture, construction, and mining machinery manufacturing (NAICS 3331), as you can see below:

NAICS Code Description 2009 Jobs 2012 Jobs % Change 2012 Avg. Annual Wage
3363 Motor Vehicle Parts Manufacturing 417,346 471,798 13% $73,036
3327 Machine Shops; Turned Product; and Screw, Nut, and Bolt Manufacturing 319,353 364,502 14% $60,253
3331 Agriculture, Construction, and Mining Machinery Manufacturing 208,263 238,270 14% $89,449
Total 944,962 1,074,570 14% $72,340

1. Motor vehicle parts manufacturing, with nearly half a million jobs, is the largest employer. Not surprisingly, many of these jobs are centered in the Great Lakes region. From 2009 to 2012, motor vehicle parts grew by 55,000 new jobs (13% growth), which is impressive given the beating (32% decline) it took from 2007-2009. Employment in this industry hasn’t recovered to pre-recession levels, but it’s good to see some jobs returning.

2. The machine shops industry is second on the list. From 2009-2012, it grew by 45,000 jobs (14%). The most striking thing is that those 45,000 jobs are a huge percentage of the 52,000 jobs it lost from 2007-2009. Machine shops seem to be gaining back what the recession snatched.

3. The third setor of note is agriculture, construction, and mining machinery manufacturing, which gained 30,000 jobs (also 14% growth) since 2009. It’s worth noting that this industry lost a mere 20,000 jobs from 2007-2009. So it hasn’t simply regained its footing; it appears to be shrugging off the recession like last year’s leaves.

Agriculture, construction, and mining machinery manufacturing is the smallest employment sector of the three, but has the highest average annual wage (nearly $90,000). Illinois, Iowa, and Texas have the highest concentration of workers in this industry.

Altogether these three sub-sectors added 130,000 new jobs in three years. Not spectacular growth, but decent all things considered. Areas where these industries are highly concentrated must be feeling some sort of relief as a result. Here is a graphical overview of all three industries.

One more quick comment: an estimated 50% of the workforce in these three industries over the age of 45, which means that now and in the coming years these industries could have a fair bit of turnover. Even if the sectors do not continue to produce a lot of new jobs, there could be decent demand for younger workers as a result of retirements.

Top States

Below we have listed employment by state for these three industries. Here are some observations:

  • Michigan, Texas, Ohio, Illinois, and Indiana employ the most workers. Michigan is the clear leader with over 130,000 jobs in 2012. It is also interesting to note the relative growth percentages for each state — 24% growth in MI, 22% growth in TX, 8% growth in OH, 14% growth in IL, 20% growth in IN.
  • The states with the highest concentration of employment in these industries are Michigan (3.84, which means that the state has nearly 4 times the concentration of these jobs when compared to a typical region), Indiana (2.99), Iowa (2.8), Ohio (2.30), and Kentucky (2.24). All of these states have concentrations at least twice the national average for these industries, and can therefore be thought of as specialized areas for these jobs.
  • Only eight states actually lost jobs in these industries from 2009-2012. California and Missouri were the biggest losers. Again, it’s a really good sign that 42 states showed job growth for these valuable manufacturing sectors. Note: Washington, D.C. has zero jobs in any of these industries.
State Name 2009 Jobs 2012 Jobs Change % Change 2012 Avg. Annual Wage 2009 National Location Quotient
Michigan 104,810 130,363 25,553 24% $86,064 3.84
Texas 82,831 100,883 18,052 22% $88,609 1.1
Ohio 81,985 88,562 6,577 8% $69,854 2.3
Illinois 66,791 76,032 9,241 14% $93,497 1.68
Indiana 58,535 70,300 11,765 20% $68,511 2.99
California 60,214 59,411 -803 -1% $65,330 0.55
Pennsylvania 36,274 42,229 5,955 16% $65,761 0.92
Tennessee 33,432 41,419 7,987 24% $62,414 1.76
Wisconsin 33,800 37,601 3,801 11% $71,635 1.77
Iowa 29,766 36,625 6,859 23% $77,180 2.8
Kentucky 28,594 32,236 3,642 13% $59,175 2.24
New York 27,357 28,672 1,315 5% $70,567 0.45
North Carolina 23,925 25,814 1,889 8% $66,651 0.84
Alabama 21,065 24,889 3,824 18% $60,253 1.56
Minnesota 20,886 24,050 3,164 15% $65,508 1.11
South Carolina 20,136 22,244 2,108 10% $62,824 1.54
Oklahoma 16,445 20,084 3,639 22% $63,483 1.46
Georgia 18,066 19,736 1,670 9% $61,195 0.64
Louisiana 14,542 16,365 1,823 13% $75,929 1.07
Nebraska 10,988 12,236 1,248 11% $65,495 1.64
Missouri 13,811 11,980 -1,831 -13% $53,584 0.72
Massachusetts 10,718 11,856 1,138 11% $73,336 0.47
Connecticut 11,086 11,759 673 6% $72,967 0.95
Virginia 10,606 11,505 899 8% $60,178 0.4
Arkansas 9,587 11,379 1,792 19% $48,567 1.14
Kansas 10,839 11,047 208 2% $60,760 1.1
Florida 10,630 10,966 336 3% $55,646 0.2
Washington 6,936 8,318 1,382 20% $59,540 0.33
Arizona 7,371 7,716 345 5% $64,791 0.42
Oregon 6,462 7,279 817 13% $60,130 0.54
Utah 6,386 7,216 830 13% $63,610 0.75
Colorado 6,204 6,919 715 12% $59,542 0.38
Mississippi 5,730 6,486 756 13% $52,561 0.71
New Jersey 5,777 5,761 -16 0% $68,973 0.21
North Dakota 5,180 5,657 477 9% $59,169 1.95
West Virginia 5,028 5,275 247 5% $69,287 1
South Dakota 3,066 3,866 800 26% $52,258 1.03
New Hampshire 3,378 3,574 196 6% $65,375 0.75
Maryland 3,279 3,098 -181 -6% $67,953 0.18
Maine 2,558 2,935 377 15% $62,766 0.58
Idaho 2,133 2,237 104 5% $51,201 0.46
Nevada 1,742 1,823 81 5% $54,168 0.22
New Mexico 1,217 1,292 75 6% $53,175 0.21
Vermont 1,261 1,234 -27 -2% $57,219 0.56
Rhode Island 1,243 1,225 -18 -1% $54,235 0.38
Wyoming 909 906 -3 0% $73,911 0.44
Montana 652 713 61 9% $46,653 0.2
Delaware 411 492 81 20% $67,660 0.14
Alaska 243 246 3 1% $100,175 0.1
Hawaii 79 56 -23 -29% $57,890 0.02
District of Columbia 0 0 0 0% $0 0
Total 944,962 1,074,570 129,608 14% $72,340

Conclusion

So, when we talk about these sectors, what jobs are we actually talking about? If someone were interested in pursuing one of these industries, what would they need to do? To help, we pulled a list of the top occupations that actually staff these three industries.

Not surprisingly, machinists and team assemblers sit at the top. Currently, there are over 240,000 of these workers across the three sectors and they make up 22% of total employment. Both of these jobs only require on-the-job training and the pay is fairly low.

In fact, a vast majority of the occupations on the list (11 out of 14) are related to production and only require work experience or on-the-job training. One occupation is related to transportation and the other two are engineering occupations (mechanical and industrial engineers).

Industrial engineers and computer controlled machine tool operators are the fastest-growing occupations. Both grew by 20%. Also note, all of these occupations experienced some sort of growth since 2009. Again, a pretty good sign for manufacturing in the U.S.

SOC Code Occupation Employed in Industry Group (2009) Employed in Industry Group (2012) Change % Change % of the Total Jobs in Industry Group (2012) Median Hourly Earnings Education Level
51-4041 Machinists 115,019 132,136 17,117 15% 12.30% $18.14 Long-term on-the-job training
51-2092 Team Assemblers 96,511 110,156 13,645 14% 10.30% $12.94 Moderate-term on-the-job training
51-4011 Computer-Controlled Machine Tool Operators, Metal and Plastic 37,599 45,048 7,449 20% 4.20% $16.65 Moderate-term on-the-job training
51-4121 Welders, Cutters, Solderers, and Brazers 38,360 44,203 5,843 15% 4.10% $16.67 Postsecondary vocational award
51-1011 First-Line Supervisors/Managers of Production and Operating Workers 36,502 41,673 5,171 14% 3.90% $24.93 Work experience in a related occupation
51-9061 Inspectors, Testers, Sorters, Samplers, and Weighers 28,194 32,086 3,892 14% 3.00% $15.96 Moderate-term on-the-job training
51-4031 Cutting, Punching, and Press Machine Setters, Operators, and Tenders, Metal and Plastic 27,402 30,288 2,886 11% 2.80% $14.02 Moderate-term on-the-job training
51-2099 Assemblers and Fabricators, All Other 21,777 24,934 3,157 14% 2.30% $14.14 Moderate-term on-the-job training
51-4034 Lathe and Turning Machine Tool Setters, Operators, and Tenders, Metal and Plastic 21,105 22,882 1,777 8% 2.10% $16.29 Moderate-term on-the-job training
51-9198 Helpers–Production Workers 16,465 18,740 2,275 14% 1.70% $10.74 Short-term on-the-job training
17-2112 Industrial Engineers 15,151 18,194 3,043 20% 1.70% $36.21 Bachelor’s degree
53-7062 Laborers and Freight, Stock, and Material Movers, Hand 15,594 17,210 1,616 10% 1.60% $11.19 Short-term on-the-job training
51-4111 Tool and Die Makers 15,054 17,202 2,148 14% 1.60% $22.84 Long-term on-the-job training
17-2141 Mechanical Engineers 14,198 16,572 2,374 17% 1.50% $37.25 Bachelor’s degree

Data and analysis from this report came from Analyst, EMSI’s web-based labor market tool. Please contact Rob Sentz ([email protected]) if you have questions. Follow us @desktopecon.



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