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.
