First Look - U.S. Manufacturing’s Comeback

Spring 2011

 

For decades, off-shoring dominated the manufacturing industry, driven by Chinese factory wages that were a tenth of U.S. pay. Now, well-known companies, like Ford, General Electric and Caterpillar, and lesser-known companies such as Blessing and Bigelow Components are bringing jobs back to the United States. What’s the story behind their return? Lower wages, cheaper transportation costs and superior quality to name a few.

In the December 8, 2010, Solution Series presentation, Jack Schultz, chief executive officer, Agracel Inc., shared the facts about manufacturing in the United States today and why manufacturing is a powerful driver of economic wealth. Here are a few highlights, some of which might surprise you.

Jack Schultz

Jack Schultz

  • Worker productivity is now $130,000.
  • The average manufacturing wage is $70,000.
  • Record manufacturing production occurred in 2008.
  • The U.S. share of world manufac­turing is 22 percent. By contrast, the U.S. share ranged from 20-25 percent from 1950 to 1980.
  • Manufacturing employees are be­coming better skilled – the number of workers with some college and a Bachelor’s degree has increased.
  • For every manufacturing job, three additional jobs are created in the economy.
  • By 2012, on a constant dollar ba­sis, Alabama per capita income will surpass Michigan as a result of the increase in manufacturing plants to the South. (Mackinaw Institute)

 According to the Illinois Chamber of Commerce, every 100 manufacturing jobs equal:

  • 415 jobs
  • $12.7 million in personal income per year
  • $5 million bank deposits
  • Seven more retail establishments
  • $7.7 of retail sales
  • $540,000 increased tax revenue
  • $2 million in service receipts

A key metric to watch is the capacity utilization rate, the percent of manu­facturing space being used. When the rate is above 80 percent, new projects are being built. According to Schultz, the current rate is just under 75 per­cent. When the rate gets beyond 80 percent, he expects more build-to-suit opportunities to result.

For the full recorded archive, visit the NAIOP E-Library.