From time to time we like to blog about the manufacturing sector (see here, here, and here). This is because manufacturing has a huge impact on job and income formation and, due to very high multiplier effects, tends to be a significant player when we talk local economic development.
To get a better handle on the bright spots, we looked deep into our most recent dataset to see what stands out. We used all the manufacturing sub-sectors (as classified by four-digit NAICS) and filtered for those sectors with the most job growth and total new jobs since 2009. The industries that rose to the top were motor vehicle parts manufacturing (NAICS 3363), machine shops (NAICS 3327), and agriculture, construction, and mining machinery manufacturing (NAICS 3331), as you can see below:
|NAICS Code||Description||2009 Jobs||2012 Jobs||% Change||2012 Avg. Annual Wage|
|3363||Motor Vehicle Parts Manufacturing||417,346||471,798||13%||$73,036|
|3327||Machine Shops; Turned Product; and Screw, Nut, and Bolt Manufacturing||319,353||364,502||14%||$60,253|
|3331||Agriculture, Construction, and Mining Machinery Manufacturing||208,263||238,270||14%||$89,449|
1. Motor vehicle parts manufacturing, with nearly half a million jobs, is the largest employer. Not surprisingly, many of these jobs are centered in the Great Lakes region. From 2009 to 2012, motor vehicle parts grew by 55,000 new jobs (13% growth), which is impressive given the beating (32% decline) it took from 2007-2009. Employment in this industry hasn’t recovered to pre-recession levels, but it’s good to see some jobs returning.
2. The machine shops industry is second on the list. From 2009-2012, it grew by 45,000 jobs (14%). The most striking thing is that those 45,000 jobs are a huge percentage of the 52,000 jobs it lost from 2007-2009. Machine shops seem to be gaining back what the recession snatched.
3. The third setor of note is agriculture, construction, and mining machinery manufacturing, which gained 30,000 jobs (also 14% growth) since 2009. It’s worth noting that this industry lost a mere 20,000 jobs from 2007-2009. So it hasn’t simply regained its footing; it appears to be shrugging off the recession like last year’s leaves.
Agriculture, construction, and mining machinery manufacturing is the smallest employment sector of the three, but has the highest average annual wage (nearly $90,000). Illinois, Iowa, and Texas have the highest concentration of workers in this industry.
Altogether these three sub-sectors added 130,000 new jobs in three years. Not spectacular growth, but decent all things considered. Areas where these industries are highly concentrated must be feeling some sort of relief as a result. Here is a graphical overview of all three industries.
One more quick comment: an estimated 50% of the workforce in these three industries over the age of 45, which means that now and in the coming years these industries could have a fair bit of turnover. Even if the sectors do not continue to produce a lot of new jobs, there could be decent demand for younger workers as a result of retirements.
Below we have listed employment by state for these three industries. Here are some observations:
- Michigan, Texas, Ohio, Illinois, and Indiana employ the most workers. Michigan is the clear leader with over 130,000 jobs in 2012. It is also interesting to note the relative growth percentages for each state — 24% growth in MI, 22% growth in TX, 8% growth in OH, 14% growth in IL, 20% growth in IN.
- The states with the highest concentration of employment in these industries are Michigan (3.84, which means that the state has nearly 4 times the concentration of these jobs when compared to a typical region), Indiana (2.99), Iowa (2.8), Ohio (2.30), and Kentucky (2.24). All of these states have concentrations at least twice the national average for these industries, and can therefore be thought of as specialized areas for these jobs.
- Only eight states actually lost jobs in these industries from 2009-2012. California and Missouri were the biggest losers. Again, it’s a really good sign that 42 states showed job growth for these valuable manufacturing sectors. Note: Washington, D.C. has zero jobs in any of these industries.
|State Name||2009 Jobs||2012 Jobs||Change||% Change||2012 Avg. Annual Wage||2009 National Location Quotient|
|District of Columbia||0||0||0||0%||$0||0|
So, when we talk about these sectors, what jobs are we actually talking about? If someone were interested in pursuing one of these industries, what would they need to do? To help, we pulled a list of the top occupations that actually staff these three industries.
Not surprisingly, machinists and team assemblers sit at the top. Currently, there are over 240,000 of these workers across the three sectors and they make up 22% of total employment. Both of these jobs only require on-the-job training and the pay is fairly low.
In fact, a vast majority of the occupations on the list (11 out of 14) are related to production and only require work experience or on-the-job training. One occupation is related to transportation and the other two are engineering occupations (mechanical and industrial engineers).
Industrial engineers and computer controlled machine tool operators are the fastest-growing occupations. Both grew by 20%. Also note, all of these occupations experienced some sort of growth since 2009. Again, a pretty good sign for manufacturing in the U.S.
|SOC Code||Occupation||Employed in Industry Group (2009)||Employed in Industry Group (2012)||Change||% Change||% of the Total Jobs in Industry Group (2012)||Median Hourly Earnings||Education Level|
|51-4041||Machinists||115,019||132,136||17,117||15%||12.30%||$18.14||Long-term on-the-job training|
|51-2092||Team Assemblers||96,511||110,156||13,645||14%||10.30%||$12.94||Moderate-term on-the-job training|
|51-4011||Computer-Controlled Machine Tool Operators, Metal and Plastic||37,599||45,048||7,449||20%||4.20%||$16.65||Moderate-term on-the-job training|
|51-4121||Welders, Cutters, Solderers, and Brazers||38,360||44,203||5,843||15%||4.10%||$16.67||Postsecondary vocational award|
|51-1011||First-Line Supervisors/Managers of Production and Operating Workers||36,502||41,673||5,171||14%||3.90%||$24.93||Work experience in a related occupation|
|51-9061||Inspectors, Testers, Sorters, Samplers, and Weighers||28,194||32,086||3,892||14%||3.00%||$15.96||Moderate-term on-the-job training|
|51-4031||Cutting, Punching, and Press Machine Setters, Operators, and Tenders, Metal and Plastic||27,402||30,288||2,886||11%||2.80%||$14.02||Moderate-term on-the-job training|
|51-2099||Assemblers and Fabricators, All Other||21,777||24,934||3,157||14%||2.30%||$14.14||Moderate-term on-the-job training|
|51-4034||Lathe and Turning Machine Tool Setters, Operators, and Tenders, Metal and Plastic||21,105||22,882||1,777||8%||2.10%||$16.29||Moderate-term on-the-job training|
|51-9198||Helpers--Production Workers||16,465||18,740||2,275||14%||1.70%||$10.74||Short-term on-the-job training|
|17-2112||Industrial Engineers||15,151||18,194||3,043||20%||1.70%||$36.21||Bachelor's degree|
|53-7062||Laborers and Freight, Stock, and Material Movers, Hand||15,594||17,210||1,616||10%||1.60%||$11.19||Short-term on-the-job training|
|51-4111||Tool and Die Makers||15,054||17,202||2,148||14%||1.60%||$22.84||Long-term on-the-job training|
|17-2141||Mechanical Engineers||14,198||16,572||2,374||17%||1.50%||$37.25||Bachelor's degree|