SCDigest Editorial Staff

Each year, the Bureau of Business Research at Ball State University in Indiana does a study to identify the states that are most friendly to manufacturing and logistics.

The 2008 report has just been released, and gives just six states a grade of “A.” Those states in order are:

1. Missouri
2. Utah
3. Florida
4. Alabama
5. South Dakota
6. Indiana

The survey analyzes each state along 20 different dimensions, from the level of education to manufacturing costs to the level of crime. Each state is ranked from 1 to 50 on each dimension, which are then averaged to produce the overall ranked list.

Meanwhile, seven states received an overall grade of “F.”  Those were:

44. New York
45. Kentucky
46. New Jersey
47. Vermont
48. Rhode Island
49. Maine
50. West Virginia

 

(Manufacturing Article - Continued Below)

The top 10 states are listed in the illustration below. For a complete listing go to: 2008 National Manufacturing and Logistics Report Card.

Mike Hicks, director of the Bureau of Business Research, notes that manufacturing and logistics industries in most of the nation are actually expanding, despite a general belief these sectors are declining.

"The condition of manufacturing and logistics remains remarkably misunderstood," he said. "Despite record production levels, expanded investment and growth in both wages and productivity, the shrinking or static demand for workers results in a mistaken caricature of these industries as dying. Nothing could be further from the truth."

The 2008 State of the Industry Report found that 2007 was a record year for American manufacturers, with inflation-adjusted values higher than in any previous year. Nationally, growth in the production of goods continues to be robust. Even in the final quarter of 2007, as the national economy slowed, industrial production rose at an annual rate of 2.8 percent.

The report also found that workers have enjoyed wage growth over the past decade. In inflation-adjusted dollars, wages rose 26 percent over the decade ending in the fourth quarter of 2007.

Manufacturing employment in the U.S. peaked in the late 1970s with more than 19.5 million manufacturing workers. That figure has declined to roughly 13.8 million as of early 2008.

Hicks points out that these job losses are overwhelmingly due to increasing productivity in manufacturing operations and the continuing trend of larger firms to outsource for non-core operations. Together, these two factors have led to a smaller, more productive and better paid labor force, which is more concentrated on the production aspects within manufacturing firms.

Do you think there are big differences in the climate for manufacturers between states? How does your experience stack up with the Ball State rankings? Do you think the US decline in manufacturing is overstated? Let us know your thoughts at the Feedback button below.