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Texas Communities Acclimate to Changing Manufacturing Industry

November 13, 2009 by Joshua Wright

A community newspaper in Central Texas has come out with this very informative article on the changing face of manufacturing. The paper looks at how the region north of Austin (specifically Georgetown) has several thriving advanced manufacturing firms.

The piece cites EMSI data that projects the region will experience an 18-percent increase in manufacturing jobs by 2018 in some areas, and also illustrates how manufacturing can have a positive ripple effect through a regional economy. According to Mark Thomas of the Georgetown EDC, “In that transformation process [of manufacturing], a lot of value has been created: Jobs have been created; wealth has been created. That’s why manufacturing is important, because you’re basically transforming raw materials. And in that process, you’re bringing new dollars into the community.”

This isn’t just true in Central Texas, of course. In many pockets of the US, certain areas of manufacturing have been prospering — even while total employment in the industry has fallen 19% since 2002, according to EMSI’s third-quarter dataset. As this newgeography.com piece illustrates, this success can be attributed to increased output.

And yet, according to the Cato Institute, notwithstanding the recent recession that has affected all sectors of the economy, US manufacturing has been thriving in recent years. How can this be so? Again, it’s the productivity. Real US manufacturing output has increased by 81% since 1987. American real manufacturing value-added – the market value of manufactured goods, over and above the costs that went into their production – reached a record-high level in 2007.

Manufacturing as a share of gross domestic product peaked in 1953 at about 28% of the economy and has been trending downward ever since. Today manufacturing accounts for about 12% of our services-dominated economy, but manufacturing output and value-added are higher than ever in real terms.

According to the United Nations Industrial Development Organization, US factories are the world’s most productive, accounting for 25% of global manufacturing value-added. By comparison, Chinese factories account for 10.6%.

Want to look at the manufacturing picture in your region? Give EMSI a call at 866.999.3974 or email Josh Wright.

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