Report finds manufacturing, logistics are key to economic growth

Topic: Miller College of Business

March 31, 2009

 Despite heavy job losses in the last year, the nation's manufacturing and logistics industries — cornerstones of the U.S. economy — continue to provide a key source of growth, says a report from Ball State University.

In the 2009 Manufacturing and Logistics Report Card, Ball State researchers grade each state in seven functional areas with industry specific information, including human capital, benefits cost, global reach, productivity and innovation, and tax climate.

The top states are Utah, Indiana, Missouri, Kansas and Alabama while at the bottom are Alaska, Maine, New York, West Virginia and Rhode Island.

"This report represents a snapshot of the health of manufacturing and logistics today, but it also offers a roadmap to state policymakers who are unhappy with the growth of these industries in their states," said Michael Hicks, director of  Ball State's Center for Business and Economic Research (CBER). "We know that the American manufacturing industry is evolving as a result of technology-centered productivity enhancements and investment from international corporations building or expanding facilities to reach the American consumer."

The report was prepared by CBER at the request of Conexus Indiana, the state's advanced manufacturing initiative.

"Manufacturing continues to be a foundation industry for many states while the manufacturing supply chain, along with growing international trade, increases the importance of logistics firms in the overall health of our economy," Hicks said. "The recession has been tough, and especially tough on manufacturing, but as the economy recovers, so too will manufacturing."

Indiana, Michigan, Kansas, Ohio and Nebraska received As for manufacturing while Alaska, New York and Virginia were given Fs.

Hicks found the research indicated some regional differences. Indiana, Illinois, Kentucky, Michigan and Ohio were the only states to receive As in the global position category while most of the Ds and Fs were found in the West.

"The Midwest enjoyed a surprisingly strong showing in global position, which included exports and various measures of foreign direct investment," he said. "Human capital scores in the South and Midwest lagged the nation as a whole, while the cost of worker benefits was lowest in the Mountain West states and the South."

The report is available for each state at an interactive Web site at http://cber.iweb.bsu.edu/research/conexus09/.

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