We continue to hear it whispered where once it was shouted: “Manufacturing isn’t dead yet, but it is certainly dying.” If growing is a signal of dying, then there is no hope for anything.
From 2009 to 2019, the best years available for comparisons given the COVID crisis, the U.S. economy, as measured by Gross Domestic Product ( GDP) grew by 51% and manufacturing by 39%. Those are current dollar figures, not adjusted for inflation, but inflation was not a significant factor in those years.
For Indiana, those growth figures were 46% for the state’s economy and 44% for manufacturing. In both years, manufacturing accounted for 29% of Indiana’s economy, a percentage no other state exceeded.
Nationally, in those ten years, manufacturing added one million jobs and 100,000 of those were in the Hoosier state. Only Michigan added more manufacturing jobs (168,000) than did Indiana. Together, these two neighbors accounted for one-quarter of the entire increase in American manufacturing jobs.
“Now drop the other shoe,” Faye of the Forest, almost invisible on the deck railing in her green tunic and slacks, snidely says.
There are some concerns about the manufacturing picture in our state. The dollar value of Indiana’s manufacturing output per job, a measure of productivity, rose from $151,100 (10% above the national average) to $178,600 (just 2% higher than the U.S.).
With just an 18.2% increase in this productivity measure, compared to the nation’s 28.6% increase, we ranked 37th in the nation.
“We don’t hear those number’s from our state economic development cheering squad,” Faye chortled.
We dig a bit deeper and there is more disturbing data. Hoosier manufacturing workers averaged a $12,900 increase in compensation compared to a national boost of $16,500. Our 20% increase in compensation compared with a nationwide 25% increase.
Additionally, in Indiana 44% of our manufacturing GDP went to compensation of workers, the 7th lowest level in the nation. This compares to 38% in North Carolina, 45% in California, and 73% in Vermont.
“Do you expect to hear from the IMA about this?” Faye asks.
“Why should the Indianapolis Museum of Art have anything to say on the issues?” I ask.
“The other IMA, the Indiana Manufacturers Association,” she say dismissively, and is gone.
No doubt there are reasons for these unfavorable figures for Indiana. Clearly, the mix of firms here is different from that in other states. We’re manufacturing RVs while others are making airplanes. We process corn into chips while elsewhere they’re manufacturing microchips.
There are differences in technology to be considered. Some places have many robots replacing labor and other places are still making things people value by hand. Maybe those figures for Vermont reflect butter churns with hand-carvings sold to summer tourists.
It would be worth finding out the reality behind the truth of the numbers.