Manufacturing professionals use information about industry trends and economic trends to make decisions about production and distribution. The Ball State University report on the manufacturing industry shows that some states are experiencing unprecedented growth in this industry, while others are falling behind due to a shortage of skilled workers and a lack of access to emerging technologies. Reviewing the results of this report will give you a good idea of how your state is faring in the manufacturing industry.
Researchers assigned each state a letter grade for manufacturing industry health. This grade was based on wage premiums paid to workers in the manufacturing industry, the share of total income earned by each state's manufacturing workers, and other factors. Oregon, Kansas, Iowa, Michigan, Illinois, Wisconsin, Indiana, Ohio, and South Carolina received an A grade for their manufacturing industries. Nevada, Hawaii, New York, New Mexico, and Alaska received a grade of F. A majority of the remaining states received C grades based on their manufacturing trends.
The Ball State study also addressed the availability of human capital in each state. Some states received failing scores because they do not have a large pool of skilled workers to perform advanced manufacturing tasks. This finding coincides with reports of worker shortages in the manufacturing industry. Jason Cunningham says the president of Rethink Robotics wants to use automated robots to combat these worker shortages. The company president, Scott Eckert, says the manufacturing industry has an aging workforce and not enough young people taking an interest in manufacturing careers. In the Ball State report, Alabama, Arkansas, Louisiana, Mississippi, and West Virginia received failing grades for human capital. Iowa, Minnesota, New Hampshire, Utah, and Washington received the highest grades.
Sector diversification is another important metric when gauging the health of the manufacturing industry in each state. States that have a lot of manufacturing activity concentrated within a specific industry are more susceptible to the market volatility caused by changing manufacturing trends. States that have a high concentration of manufacturing in several sectors are less likely to suffer large swings in income and unemployment. Georgia, Mississippi, Missouri, Virginia, and Washington received the best grades for sector diversification. Alaska, Arizona, Idaho, New Mexico, and Oregon received failing grades. Although sector diversification can help manufacturing companies weather the effects of changing industry trends, it does have some risks. When a state focuses on one particular sector, it has the opportunity to become known as a specialized region for that type of manufacturing. States with a high level of sector diversification do not have this opportunity.
This study has important implications for the United States because it identifies the manufacturing weaknesses and strengths of each state. When you know about the major trends affecting the manufacturing industry in your state, you will be better prepared to make lateral moves within the industry or make decisions that affect your employees.
(Photo courtesy of renjith krishnan / freedigitalphotos.net)
Become a member to take advantage of more features, like commenting and voting.
Register or sign in today!