States :Leading Manufacturing Resurgence

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... Kentucky 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.” Louisiana 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,” saysLouisiana 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 “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 plantsso 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 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 theMississippi Development Authority. “Drax Biomass’ decision to locate its plant in Gloster is exciting news for all of Southwest Mississippi.” New York  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 North Carolina North Carolina has a long history of manufacturing excellence — from its traditional, natural-resources-based industries to the innovative, high-tech R&D and commercialization that give its research centers, such as Research Triangle Park, a world-class reputation. Manufacturing is the largest driver of North Carolina’s economic growth (35 percent) coming out of the recession. Almost 20 percent of the GSP is attributed to manufacturing by NAM (2011). Nearly 440,000 employees work in manufacturing, which represents 11 percent of the state’s non-farm work force, according to the BLS (November 2012). Over the last two years North Carolina has added 7,200 net manufacturing jobs. “Some companies are coming to North Carolina because of reshoring initiatives,” says North Carolina Deputy Secretary of Commerce Dale Carroll. “They realize that North Carolina’s geographic proximity to customers and supply chains, highly skilled and productive work force, and reasonable transportation, labor, and logistics costs make it possible to be cost-competitive with overseas locations like China.”  Top manufacturing industries in North Carolina include food, chemicals, fabricated metal products, computers and electronics, and furniture.  Representatives from North Carolina Department of Commerce regional offices across the state make 1,500 visits a year to businesses to “provide service after the sale,” says Carroll. “We check in regularly to see how we can help them grow their operations. Our relationships with these companies and local trade organizations really make a difference.” In 2012, 68 percent of the new projects that were announced were in the manufacturing field. Lenovo indicated it would construct a plant in Guilford County to build computers, creating 115 new jobs. Other high-level projects include KSM Castings ($45 million, 189 jobs), Herbalife ($130 million, 493 jobs), Klausner ($110 million, 350 jobs), Deere-Hitachi ($97 million, 340 jobs), andAshley Furniture ($81 million, 550 jobs). Herbalife’s project in Winston-Salem involves retrofitting an existing facility to create a world-class manufacturing plant for dietary supplements and food products. This will be the company’s largest owned manufacturing facility. To help facilitate this expansion, Herbalife received a grant of up to $1 million from theOne North Carolina Fund, which provides financial assistance for business projects that are considered important for growing the state economy.  Ohio According to the U.S. Bureau of Labor Statistics, Ohio gained 50,000 manufacturing jobs from 2009 through December 2012. Overall, manufacturing has accounted for about a quarter of the state’s job growth over the past two years, while increasing its output by about 12 percent ($8 billion). Over the last 12 months, the hottest manufacturing sectors for jobs were transportation equipment (1,700), food manufacturing (1,900), and plastics and polymers (1,200). Other key industries on the rebound are chemicals, structural steel, and fabricated metals. “We are seeing the resurgence of Ohio’s manufacturing industry, which is creating economic prosperity and jobs for Ohioans,” says Christiane Schmenk, director of the Ohio Development Services Agency. “From automotive to advanced manufacturing technologies such as fuel cells, we are implementing more resources to support Ohio manufacturers.” These resources include expanded services from the Manufacturing Extension Partnership program, which now provides a broader regional model with five regional centers and has increased outreach to smaller manufacturers with 50 or fewer workers. The state also introduced the Energy Efficiency Program for Manufacturers, which has invested more than $24 million in Ohio’s manufacturing sector to help hundreds of companies reduce their energy consumption, improving cost efficiencies and making them more competitive in the global marketplace.  Stillwater Technologies, a precision machining and fabrication company in Dayton, has been in business for over 50 years in the Buckeye State. It builds parts for the communications, aerospace, defense, machine tool, automotive, and energy industries. CEO Bill Lukens indicates demand for experienced operators is very high. “We are also seeing more interest in manufacturing by younger people,” says Lukens. “That’s good news because we can’t find enough experienced workers. In Ohio we have people with a can-do attitude, as well as plenty of training opportunities. When you add our well-developed infrastructure and a transportation network [that] few states can duplicate, Ohio is a great place to make something.”  Oregon Manufacturing represented 28.7 percent of Oregon’s GSP in 2011 (NAM) — the largest share in the nation. And, the American Institute for Economic Research recently recognized Oregon as the best state in the nation for manufacturing. With a focus on quality and adding value in advanced manufacturing products, Oregon has developed and maintained a skilled work force ready for the modern manufacturing environment. “With the number of Oregonians employed in manufacturing at 10 percent and growing, making high-quality products for the entire world is one of our state’s greatest economic strengths,” says Tim McCabe, director of Business Oregon. Top manufacturing sectors are computers and electronics, food, wood products, fabricated metal, transportation equipment, and machinery. Global companies like Boeing and Intel are undergoing billion-dollar expansions.  Oregon is also experiencing the reshoring of key manufacturing operations, as companies choose to expand in the state rather than overseas. Examples include Mastercraft Furniture; Shimadzu, an advanced manufacturer of medical devices; and Oracle America, which recently decided to expand its hardware manufacturing of data center servers in Oregon. Value-added food processing is another key component of Oregon’s manufacturing sector. Oregon’s food-processing industry employs more than 40,000 people, with more than 1,400 companies generating nearly $650 million in exports annually. Products include wine, beer, cheese, and fruits. Innovation is also driving Oregon’s food industry, with state-sponsored research plans to help food processors improve productivity and cut energy consumption by 25 percent in the next 10 years.  Pennsylvania Pennsylvania’s manufacturing companies are leading the state’s economic resurgence following the Great Recession. With gross state product (GSP) exceeding $70 billion, Pennsylvania manufacturers account for more than 12 percent of the state’s GSP (NAM). Productivity is on the rise as companies continue to adopt process innovations and new technologies, including automation and additive manufacturing. “Manufacturing in the U.S. is definitely changing,” indicates Pennsylvania Governor Tom Corbett. “It is important for governors to continue to learn so they can determine the best way forward, ensuring good businesses and rewarding jobs for their states.”  Pennsylvania’s economy is highly diversified — no single industry accounts for more than 5 percent of the total number of businesses in the state. Key sectors include transportation, metal machining and fabrication, glass, chemicals, and plastics. These industry sectors are also well positioned to support growth in emerging markets such as energy, medical devices, and life sciences. Pennsylvania also has a plentiful supply of natural gas, which is being produced from the Marcellus and Utica shale formations via hydraulic fracturing. This vast energy resource, combined with a deregulated electricity market, is driving down the price of energy for businesses, reducing their operating costs.  In 2012 the state government passed legislation that reduces red tape and costly mandates for small businesses, which make up the majority of companies in Pennsylvania. The Small Business Regulatory Reform Act amends the Regulatory Review Act to require state agencies to consider the impact of any proposed regulations on smaller businesses.  “Manufacturing adds more than $70 billion in value each year to our state’s economy and employs more than 570,000 Pennsylvanians,” says Governor Corbett. “Creating a business climate where smaller manufacturers can prosper will grow ur economy and create more jobs for our citizens.” South Carolina Big companies like BMW, Boeing, Continental, and Michelin have invested more than $7 billion in new projects in South Carolina over the last two years, creating about 21,000 jobs since January 2010. This represents a greater than 10 percent employment gain — one of the best in the country. Since January 2011, South Carolina has recruited more than $5 billion in capital investment and more than 8,000 jobs to the automotive sector. New announcements include Kiswire’s $15 million expansion in Newberry County, which will meet the higher demand for steel cord. Tire maker Michelin North America, which is the largest manufacturing employer in South Carolina and operates 18 production facilities in the state, announced it would expand its existing rubber production operations in Anderson County. The $200 million project is expected to generate 100 new jobs and be operational in 2014. In the last 21 months, the company has committed to invest a total of $1.15 billion and create at least 870 total new jobs in South Carolina. In January 2013 South Carolina was recognized by IBM-Plant Location International (IBM-PLI) as the top state for jobs linked to foreign investment. South Carolina placed first above Texas and North Carolina, which were ranked second and third, respectively, in the 2012 report. “Hundreds of foreign firms employ tens of thousands of residents throughout our state, creating wealth and helping make the communities they’re in sustainable,” says Secretary of Commerce Bobby Hitt. “The IBM-PLI report’s ranking is another confirmation that people are taking notice of the economic development successes we’ve had here in the Palmetto State.”  Texas Texas has a highly diversified economy, ranging from rich energy resources to high-tech industries like semiconductors, electronics, aerospace, and information and communications technology. Oil and gas recovery and production technologies continue to evolve, expanding the extent of productive reservoirs and reducing the price of natural gas — a big advantage for industries that rely heavily on natural gas as an energy source for manufacturing. According to the Texas Workforce Commission (TWC), Texas manufacturing employed 850,300 in December 2012 — about 8 percent of the state’s nonagricultural employment. Texas added approximately 5,700 manufacturing jobs in 2012 and has consistently increased the total number of manufacturing jobs every year since 2009.  Texas continues to attract innovative, advanced technology companies to the state through its “deal-closing” Texas Enterprise Fund (TEF) — the largest of its kind in the country. For example, with help from TEF, Caterpillar opened its $200 million, hydraulic excavator manufacturing plant in Victoria last year. Also, with assistance from the TEF, in August 2012 Samsung committed to an additional investment of up to $4 billion to upgrade its Austin chip manufacturing plant, bringing the company’s total investment in Texas to more than $13 billion. “Texas’ location, infrastructure, work force, and regulatory environment continue to provide the manufacturing sector with a pro-business climate,” indicates Aaron Demerson, executive director of Economic Development and Tourism for the Office of the Governor. “These factors, combined with success stories like Samsung and Caterpillar, show why Texas has consistently grown its economy and continues to be a great state for manufacturing and business.”  Wisconsin Wisconsin’s manufacturing companies employ about 17 percent of the state’s non-farm work force, according to the BLS (November 2012) — nearly twice the national average (9 percent). The state is home to 11,453 manufacturers that employ more than 450,000 (BLS, Nov. 2012) workers and support thousands more jobs in other industries.  Key “driver industries” include wood products, transportation equipment, and electrical equipment. Wisconsin’s top three categories for international exports are industrial machinery equipment, electrical machinery, and medical/scientific instruments.  “We’re seeing significantly improved health of our manufacturing sector compared to two years ago,” comments Lee Swindall, vice president of Business and Industry Development for the Wisconsin Economic Development Corporation. “Wisconsin manufacturers are investing in new capital equipment as they experience rising demand for their products overseas.”  Wisconsin has enacted recent policy enhancements that benefit manufacturers. For example, an income tax credit for manufacturing, which starts in 2013 and will be phased in over four years, virtually eliminates state income taxes for manufacturers taking advantage of the credit. Businesses relocating to Wisconsin will also be eligible for a two-year income tax holiday. Wisconsin has one of the highest-skilled manufacturing work forces in the nation, in part due to its strong technical college system. The first of its kind in the nation (established 1911),  Wisconsin’s system serves one of every eight adults. With more than 800 specialized programs and 500 satellite training locations across the state to choose from, companies know they can find highly trained workers with the skill sets they need.  “Wisconsin’s strong and diverse manufacturing sector has helped our state tremendously during the economic downturn and put us in a strong position going forward,” adds Swindall. “We need more skilled workers in Wisconsin for the manufacturing sector. We’re addressing that challenge through a number of initiatives, including partnering with our technical college system and reaching out to high school students about the benefits of a career in manufacturing.”