Manufacturing Base Broadens

Manufacturing's geographic distribution in the United States has shifted in recent decades, with more manufacturing taking place outside of the traditional centers in the Northeast and Midwest. This broadening of the manufacturing base has raised its importance to all regional economies. The five largest manufacturing states in terms of sheer dollar volume of business activity in 2004: California, Texas, Ohio, Michigan and Illinois.

Another way to look at manufacturing's role in state economies is to understand how much of the state economy depends on the manufacturing sector. In this context, the largest manufacturing states are Indiana, Iowa and Wisconsin. Ohio, Kentucky, North Carolina and Arkansas tie for fourth place, followed by Michigan and Oregon.

All too often the perception is that the heyday of U.S. manufacturing is in the past, but nothing could be further from the truth. Standing by itself, U.S. manufacturing would be the eighth largest economy in the world. There are six manufacturing pillars that support today's U.S. economy. Manufacturing:

  • makes the highest contribution to economic growth of any sector;
  • is responsible for more than 70 percent of private sector research and development and the center for a wide range of advanced technologies that cut energy use and lead to a cleaner environment;
  • achieves a high productivity rate year in and year out, increasing by more than 50 percent in the past decade;
  • contributes more than 60 percent of U.S. exports or about $50 billion a month;
  • pays wages and benefits that are about 25 percent higher than in non-manufacturing jobs;
  • multiplies every dollar spent into an additional $1.37 in economic activity, greater than other sectors.
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