In my last blog post of June 3, 2022, the question was posed: Did states with manufacturing job resiliency through the pandemic also fare better in terms of total job change? The tentative answer offered with that initial analysis and blog post is that manufacturing and total employment growth tend to go hand-in-hand — albeit more so in some states than others.

With this post, I drill down a bit more on specific sectors in manufacturing and their comparative performance through the pandemic up to mid-2022.

Composition of U.S. Manufacturing

As of mid-2022, manufacturing accounted for 12.8 million jobs or 8.4% of all non-farm jobs in the U.S. The following graph shows the distribution of these jobs by specific manufacturing sector.

Source: U.S. BLS Current Employment Statistics (CES).

As illustrated, the two largest sectors from an employment perspective are transportation and food manufacturing — each accounting for more than 13% of U.S. manufacturing jobs (in effect better than a quarter of American manufacturing when considered together). Fabricated metals represents over 11% of U.S. manufacturing. No other sector exceeds 10% of the manufacturing job total.

Pandemic Era Manufacturing Job Change

As of mid-2022, manufacturing had fully recovered from employment losses experienced in the pandemic — especially as occurred in the initial lockdown months over the Spring of 2022. While overall manufacturing employment is back to where it was pre-pandemic, some industry sectors have fared better than others in the last 2+ years — as depicted by the following graph.

What we see is a clear differentiation between manufacturing winners and losers — at least from a jobs perspective:

Somewhat surprisingly, the biggest winners are chemicals and food product manufacturing — each up by about 46,000 jobs from February 2020 to June 2022. Other strong gains ae noted for beverages, plastics/rubber, wood products and electrical equipment.
The most substantial job losers are noted as featuring printed materials and transportation equipment (each down by 43-44,000 jobs nationally). Printed materials have suffered with transition of written material from hard copy to electronic media. Transportation manufacturing has been affected by issues ranging from aircraft safety to lack of semiconductor components for vehicles. Other significant job losses are noted for the combination of primary and fabricated metal products and machinery.

Also surprisingly, computer and electronic products manufacturing added only 1,100 jobs in the U.S. over the pandemic period — a time of strong demand for these products albeit with substantial import activity.

All together, manufacturing sectors with job gains tallied close to 210,000 net new jobs added domestically over this 2+ year period. Loser sectors accounted for a nearly offsetting reduction approaching a combined total of 200,000 jobs lost.

What does the pandemic experience have to say for domestic manufacturing going forward? Two thoughts:

First, it is impressive that, as a group, manufacturers largely held their ground through the pandemic — a better track record than for many of the commercial service and institutional sectors of the economy. This is a hopeful portent for continued manufacturing reinvigoration, especially at a time of what appears to be the emerging trend of de-globalization.
Second, it is concerning that some sectors that seemingly should have performed better but did not. This is especially the case for computer and electronic products for which job counts have remained essentially flat. Similarly concerning is the weak performance of metals and machinery manufacturing. Somewhat unclear is whether touted benefits of domestic re-shoring have been blunted by other factors ranging from increased productivity (as with automation) to supply chain issues (as with securing raw materials). Job growth across these core manufacturing activities will be critical if America is to continue the economic reclamation of its heartland with reduced dependence on what may be now perceived as less reliable vendors globally.

A couple of added items may be of note. One is the extent to which paper products (including printed materials) are succumbing to electronic information. Also noted is the weak job domestic performance of petroleum and coal products even in the face of global energy supply constraints.

So, going forward, as a takeoff on Mark Twain, the rumored death of American manufacturing may prove to have been greatly exaggerated. Signs of a comeback are evident but sustained success is by no means assured.

Greater domestic economic self-reliance can be of benefit for reasons ranging from supply chain management to reduced inflationary pressure to protection of U.S. defense capability. Getting there depends less on attempting to pick winners versus losers than on fostering a level playing field globally coupled with a can-do culture where making things again becomes a source of American pride and prosperity.

With this blog post, I take a look at the relationship between manufacturing and total job change through the pandemic. The question is: Did states with manufacturing job resiliency through the pandemic also fare better in terms of total job change?

The tentative answer offered with this initial analysis and blog post is that manufacturing and total employment growth tend to go hand-in-hand — albeit more so in some states than others.

Overall Employment Change

For this initial analysis, I compare employment as of December 2019 (pre-pandemic) with subsequent employment for December 2021 (as the nation was emerging from the pandemic. The map below illustrates rates of U.S. non-farm employment growth (darker green) versus job loss (lighter green) state-by-state.

Over this two-year period, Utah experienced the strongest jobs gain, with total non-farm employment increasing by 3.9% from December 2019 - December 2021. Utah was followed by Idaho, Texas, Arizona and Montana in % job growth at positions 2-5, respectively.

Of the 50 states, just these five states had regained their 2019 job count two years later. The other 45 states had yet to recover to pre-pandemic levels.

#50 in job change was Hawaii, with 11.9% fewer jobs in December 2019 than two years earlier. Other major job losers were New York, Vermont, Louisiana, Alaska, and Nevada (at positions 49-45, respectively).

Manufacturing Job Change

We now shift to focus in on change in manufacturing employment over this same two-year period (as illustrated by the second map below). While the manufacturing winners and losers do not align precisely there are similarities — but with some striking exceptions.

The #1 job manufacturing job gainer is Alaska (up by 14.1% in two years). This is remarkable as Alaska ranked a lowly 46th in terms of total job change). For at least this state, success on one front (manufacturing) is no guarantee of similar accomplishment on the other (total employment).

Other major manufacturing job gainers were Utah, Montana, Rhode Island and New Mexico (at positions 2-5). Only two states make the top five listing in terms of both manufacturing and total job growth — Utah and Montana.

Of the 50 states, 13 gained manufacturing jobs from December 2019 - December 2021. The other 37 experienced no net change or lost manufacturing employment.

The greatest percentage loss in manufacturing employment occurred in Hawaii — also the biggest loser in terms of total employment. Other significant losers of manufacturing employment are Delaware, Washington, Oklahoma, Louisiana, and New Hampshire (at positions 49-45, respectively). Only two states — Hawaii and Louisiana — show up in the bottom five in terms of total as well as manufacturing job change.

States with historically high proportions of manufacturing employment do not appear to be showing up among either the winners or losers in terms of recent employment shifts. Indiana has the highest concentration of manufacturing jobs at 18% of its state’s total employment — followed by Wisconsin at 17%. Other states with more than 10% of employment in manufacturing are all also in the industrial heartland of Alabama, Arkansas, Iowa, Kansas, Kentucky, Michigan, Minnesota, Mississippi, Ohio, South Carolina, and Tennessee. Not experiencing major gains or losses relative to the full U.S., but largely holding their own.

Correlating Manufacturing & Total Job Change

So what can we say about the relationship between manufacturing and total employment change over two years of pandemic-related experience? As illustrated by the scatter plot below — maybe a little, maybe a lot.

As permitted by space available on the above scatter-plot, states associated with particular outcomes are noted, especially for the outliers. Unfortunately, there is not space to separately identify observations that are tightly clustered in close proximity to experience of other states.

Two quick observations are suggested:

There clearly appears to be some overall association between change in manufacturing and total job change over the last two years. States that tended to hold their own with manufacturing tended to also perform better with respect to overall job resilience. As illustrated by the (dotted) trend line, on average a 1% point increase in manufacturing employment is associated with a 1.6% point increase in total employment. That’s saying something — especially for those states clustered close to the trend line.
However, there also appears to be considerable variation in outcomes meaning that other factors are also at work in shaping state-by state outcomes. This is particularly apparent with some of the more extreme outliers — as with Hawaii, the Virgin Islands, Alaska and the District of Columbia. Factors such as relative tourism dependency, historic manufacturing orientation and historic as well as pandemic-related regulatory practices (as with lockdowns) appear to have played a role — though are not explicitly quantified with this overview analysis.

Does manufacturing employment drive total job change? Or vice versa — is strong manufacturing employment growth a result of overall job gains? No claim is made as to which is the dependent versus independent variable. Very possibly, there is some form of a feedback loop — with manufacturing growth supporting stronger overall job growth which further enhances a state’s manufacturing prospects.

More detailed evaluation of the linkage between manufacturing and overall employment growth is likely to be the subject of future blog posts. In the meantime, the overall observation is that manufacturing and total employment growth tend to go hand-in-hand — albeit more so in some states than others.

If one is looking at this question from the perspective of an economic development practitioner, there is some case to be made for manufacturing growth as a useful strategy for overall employment change and resilience. This is perhaps even more so with renewed emphasis on improved U.S. manufacturing competitiveness for reasons ranging from better managed supply chains to improved national defense and homeland security.