13th annual Municipal Finance Conference


13th annual Municipal Finance Conference


Despite Slowdown, Manufacturing Still Important

The rebound of manufacturing jobs has been one of the bright spots of an otherwise sluggish economic recovery. 

The United States had 3.7 percent more manufacturing jobs in February 2012 than in February 2010, representing a more robust rate of growth than that for overall employment, which rose by only 2.7 percent during the same time period. The post-recession rebound of manufacturing employment has been a driver of economic recovery in a number of the nation’s major metropolitan areas, including several manufacturing centers. 

The latest edition of Brookings’ MetroMonitor, which has tracked the economic performance of the nation’s 100 largest metropolitan areas since the beginning of the Great Recession, shows  that 18 of the 20 large metropolitan areas with the strongest economic recoveries had increases in manufacturing employment since their total employment bottomed out. This group includes manufacturing centers like Detroit, Grand Rapids, Ogden, Portland (OR), San Jose, Toledo, Worcester, and Youngstown. Meanwhile, only six of the 20 with the weakest recoveries saw growth in the number of manufacturing jobs during their recovery periods.

Fifty-seven of the nation’s 100 largest metropolitan areas gained manufacturing jobs between the first quarter of 2010 and the last quarter of 2011.The manufacturing centers of Akron, Allentown, Cleveland, Detroit, Grand Rapids, Greensboro, Greenville, Louisville, Milwaukee, Ogden, Portland (OR), Rochester (NY), San Jose, Toledo, Wichita, Worcester, and Youngstown were among those 57. Of these, all but Allentown, Cleveland, Greensboro, and Milwaukee were among the 40 strongest-recovering large metropolitan areas (among the 100 largest metropolitan areas).

In the last half of 2011, however, the manufacturing job recovery slowed, which is typical as an economic recovery progresses. 

In the 100 largest metropolitan areas taken together, the rate of manufacturing job growth slowed from 0.7 percent in the second quarter to 0.2 percent in the third quarter to 0.02 percent in the fourth quarter. In the Great Lakes manufacturing centers of Akron, Cleveland, Detroit, Louisville, Milwaukee, Toledo, and Youngstown, the rate of manufacturing job growth was slower during the fourth quarter of 2011 than during any of the three previous quarters. Meanwhile, the number of large metropolitan areas experiencing manufacturing job growth fell from 72 in the second quarter to 54 in the third quarter to 46 in the fourth quarter.

This is in some ways expectable. Since the 1970s the nation has not had more than three consecutive quarters of manufacturing job growth in which the rate of growth accelerated each quarter. However, for metropolitan areas whose economies depend heavily on manufacturing, the latest slowdown represents a new challenge for places used to them.