Is Manufacturing Weighing Down the US Economy?

Tag : Used Industrial Machinery

Ever since Inc. started ranking the Best Cities for Doing Businessin 2004, the bottom rung of the rankings has been largely dominatedby older industrial cities where factories have long been abandonedand once booming economies have dried up. The 2008 list bears thissobering fact: among the largest regions surveyed, Detroit sits onthe bottom at No. 66, with Warren Troy-Farmington Hills, Mich.,Cleveland, Providence, R.I., Philadelphia, and the New York twins-- Rochester and Buffalo -- doing only slightly better.
The same pattern can be seen on the lists of midsize and smallcities, where the bottom rankings consist largely of formerindustrial towns along the Great Lakes belt, including Ohio,Michigan, and Indiana. Dayton, Ohio, falls last at No. 96, lying atthe bottom of the midsize list of cities. Among the small metros,Battle Creek, Mich., languishes at No. 173, with Michigan citiesSaginaw and Flint doing only slightly better.
So given this persistent underperformance, is manufacturingweighing down the U.S. economy? The answer may surprise you.
Even though the industrial towns dominated by what used to becalled the Big Three automakers (General Motors, Ford and Chrysler)and their suppliers have been devastated by slumping sales, a hostof other manufacturing regions have emerged as strong performers.For the most part, the largest beneficiaries of these changes arelocated either in the Intermountain West -- the region between theRocky Mountains and the Sierra Nevada, and the Sun Belt regionstretching across the southern bottom of the country. Here, U.S.carmakers are not well represented and smaller communities with ahost of specialized industrial companies have expanded in the faceof tough times.
For example, large metros, such as Las Vegas (No. 8), Houston (No.3) and Salt Lake City (No. 4), have attracted specializedindustrial companies from high-cost, high-regulation locales likeCalifornia, including aerospace, electronics, and industrialequipment. All these areas have experienced industrial job growthsince 2000; Las Vegas alone has seen its number of manufacturingjobs grow by more than 30 percent.
But much of the action is in smaller areas. Many of them, likeMidland, Texas, (No. 1); Longview, Texas, (No. 11); and Morgantown,W.Va., (No. 15), are tied to energy production. Such places haveexperienced 15 percent or more industrial job growth since 2000.
Another hot spot is in the Great Plains. Many cities in the regionhave attracted sophisticated manufacturing firms in technology,farm machinery, and electronics as well as an expanding number ofenergy-based companies ranging from oil, gas, and coal to windpower. Grand Forks and Fargo, N.D., No. 56 and No. 28 respectively,have experienced a quiet industrial boom, increasing theirmanufacturing jobs by more than 14 percent since 2000.
Already home to numerous agricultural implement firms, the largestmanufacturer in Grand Forks is LM Glasfiber, a Danish manufacturerof propeller blades for windmills. Since the North Dakota officeopened in 1999, it has expanded from 20 to 900 employees. PlantManager Ralph Sperrazza says he appreciates the loyalty anddedication of the employee base, many of whom are returnees fromlarger metropolitan areas such as Minneapolis.
One effect of LM, local economic development officials reveal, hasbeen a notable tightening of the labor market and an increase inwages in Grand Forks. The same result, notes North Dakota StateEconomist Larry Leistritz, is occurring elsewhere in the region asother core industries, ranging from energy and office furniture tofarm equipment, have enjoyed rapid growth.
"These are the best times we've seen in many decades," Leistritzbeams. "And it is being felt broadly across the entire society."