Manufacturing Highlights from the SGA Presentation in Washington, D.C.

On June 5, 2015, the Southern Governors’ Association held a presentation at the Southern Regional Manufacturing Consortium. This presentation centered on the state of the manufacturing industry, and highlighted many important facts that reflect the state of the manufacturing industry throughout the southern portion of the U.S.A.

What were these highlights? Why should you and your company care?

Here are a few important things that were featured in the SGA presentation:

Manufacturing Employment Share is down, but % Contribution to Total U.S. GDP Remains Largely the Same

Last year saw one of the first real net gains in manufacturing sector employment in the U.S.A. in over a decade. However, despite the net addition of over 10,000 manufacturing jobs, the percentage of people employed by the manufacturing industry is down compared to the total number of people employed within the U.S.

Oddly enough, though, the actual percent GDP share of the manufacturing industry remains nearly the same as it has been for decades. This means that the manufacturing industry has managed to keep up its productivity even though it is getting a smaller share of the U.S. workforce.

In short, manufacturers are getting more done with a smaller chunk of the workforce.

Staying competitive and profitable as a manufacturer means being able to keep up in a field where productivity is constantly evolving.

State Policies Strongly Influence Manufacturing Infrastructure/Development

As a business owner, it’s only natural to want to set up shop in a region where you’ll see the most benefit for you and your company. Texas, one of the few southern states to make the “Top 10 Tax Climates for Business” list (at #10), had more manufacturing output in 2013 ($233.2 million) than the next three southern states combined (NC at $98.3 mil, LA at $59.33 mil, and GA at $52.49 mil, for a total of $210.12 million).

Texas was also on several other “Top 10 States” lists, including:

• Site Magazine’s Most Competitive States (#3)
• Chief Executive Best State for Business (#1)
• Forbes’ Best States for Business 2014 (#6)
• CNBC’s Top States for Business 2014 (#2)
• Area Development Top States for Doing Business 2014 (#2)

The business-friendly climate and booming population of Texas seems to have drawn manufacturers to the state in droves. Also, the state has no corporate tax at this time, making it attractive to companies (although it does have gross receipts taxes).

This demonstrates that states who want to grow strong, middle-class manufacturing jobs need to create business-friendly environments for manufacturers that reduce red tape hassles and promote productivity and business stability.

American Transport Infrastructure NEEDS Maintenance/Upgrading

One troubling highlight of the SGA presentation was the impact of America’s transport infrastructure on business.

Did you know that the average commuter spends roughly 38 hours in traffic each year? Add up all of the commuters in the U.S.A. and that translates into “5.5 billion hours of lost productivity and 2.9 billion gallons of wasted fuel” each year!

Part of the reason that commutes involve so much wasted time is that existing road systems aren’t built to handle the sheer number of vehicles that they have to take during rush hour. According to the SGA presentation, in 2013 “24% of all bridges—64,000 in all—were identified as structurally deficient or functionally obsolete.” That’s nearly a 1 in 4 chance that your delivery truck will have to pass through a bridge that is not up to the task of handling the strain.

Obsolete or under-maintained transportation infrastructure is more than just a nuisance for workers trying to get to work on time—they’re safety hazards that could potentially cause a permanent delay of your shipments, preventing the completion of a work order you finished once already.

This is just one more reason to work with political leaders to ensure that the needs of the American public and businesses alike are taken care of.

Together, we can keep the recent positive trends in the manufacturing industry going, providing benefits for all Americans by growing jobs and the economy.