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Manufacturing Matters
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Manufacturing Matters |
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Manufacturing MattersThe Importance of Manufacturing to North CarolinaManufacturing matters to our state, to our country and to the world. Manufacturing continues to be the leading contributor to North Carolina’s Gross Domestic Product (GDP) at 19.4%, although that represents a decline of 5.6% from 1998 to 2008. Manufacturing continues to employ the most people at 14.5% of the total workforce, providing above-average wage jobs to more than 518,000 individuals. Among the states, North Carolina ranks 9th for its contribution to the US GDP based on 2008 data, leaping from 11th in 2006. North Carolina ranks 5th in the United States in manufacturing and first in the Southeast. More than 98% of exports come from manufacturers, both in North Carolina and the rest of the country. Small manufacturers play a crucial role in the global marketplace. Of the 10,458 manufacturing companies in North Carolina, almost 80% have 50 or fewer employees. Manufacturers generally are located in the more populous areas of the state along the Interstate 40 and Interstate 85 corridors. The top three industries based on the percentage of North Carolina manufacturing workers are food product manufacturing, furniture and textiles. In 2007, food manufacturing surpassed furniture in number of employees. The food product industry also contributes the highest GDP within the industrial sectors in North Carolina. Manufacturing is continually evolving to fulfill the growing needs of a global market.  D-Link North Carolina ranks 9th in the nation for its contribution to the national Gross Domestic Product (GDP) based on data for 2008.  D-Link North Carolina's manufacturing output places it 5th in the country by providing 4.7% of the total manufacturing contribution of the country. North Carolina leads the Southeast in manufacturing.  D-Link Manufacturing is the leading contributor to the state's GDP at 19.4% of the total. Manufacturing was one of the few sectors to experience an increase from 2007 to 2008. The closest sector to follow is finance and insurance at 9.9% of the GDP. Employment and WagesManufacturing continues to lead all industrial sectors in North Carolina as both a percentage of the state's GDP and as an employer. Manufacturing salaries are within the top 10 within the industrial sector. Manufacturing in the 21st century is highly efficient and productive and workers have to be educated, motivated and creative. The simple assembly line has practically disappeared. There’s nothing simple about the products and how they’re made. Only intelligent people need apply. The Manufacturing Institute, the research arm of the National Association of Manufacturers, reports a moderate to severe shortage of skilled production employees. The shortage is due, in part, to the stigma of industrial careers. But the reality is that many manufacturing jobs depend on highly skilled employees working in clean environments or technologically advanced settings. Students of all ages, and their parents, need to understand the importance of engineering and manufacturing careers to our nation’s economy.  D-Link  D-Link The weekly wages in manufacturing place it 8th among the state's industrial sectors. Manufacturing wages are higher on average than healthcare and social assistance, transportation and construction. Location of ManufacturingManufacturers tend to locate in the more populous areas of the state along the Interstate 40 and Interstate 85 corridors. Manufacturing is generally an urban activity. In North Carolina, most manufacturers happen to be located in the most populated counties of Mecklenburg, Wake and Guilford.  D-Link Just over 2.2 million residents or 23.8% of the state's population reside in the top three counties of Mecklenburg, Wake and Guilford.  D-Link The number of manufacturing establishments in North Carolina total 10,458. Approximately 2,466 establishments are within Mecklenburg, Guilford and Wake counties.  D-Link It is no surprise that the most populous counties also have the most manufacturing establishments. Combined they account for almost 24% of the total statewide manufacturing establishments, with Mecklenburg at 9.7%.  D-Link Within the county of Durham lies Research Triangle Park (RTP) and its abundance of advanced manufacturing establishments including the bio-science sector. Based on www.rtp.org, RTP has been and continues to be a model for innovation, education, and economic development that has been applied around the world. It is home to winners of the Nobel and Pulitzer prizes, as well as recipients of the U.S. Presidential Award and National Foundation Awards. Some of the most profound discoveries of the 20th century have been influenced by scientists and researchers working in RTP, including the invention of the Universal Product Code and 3D ultrasound technology. Durham county leads the state in average wages which are 66% higher than Mecklenburg, the next highest wage payer. Although Catawba county has the 4th largest manufacturing establishments, wages are 6th highest in the state at $245,000 total manufacturing wages.  D-Link The distribution of manufacturing employees is concentrated in Guilford, Mecklenburg and Durham counties. Guilford County holds the #1 spot based on the percentage of manufacturing employment, due to the strength of chemical manufacturers and furniture and related product manufacturers in the region. Key Manufacturing IndustriesManufacturing is a broad category that includes any business that produces a product. By looking at manufacturers by product categories, several patterns emerge. Food product manufacturing provides the highest contribution to state GDP while comprising only 594 establishments out of the state's total of 10,458 establishments. Food product manufacturers transform livestock and agricultural products into products for intermediate or final consumption, including grain milling, sugar and confectionery, dairy, seafood and bakery production, to name a few. It also includes beverage and tobacco product manufacturing. Fabricated metal establishments are the most numerous, yet food product manufacturing has the largest workforce. The difference is that fabricated metal shops generally employ fewer than 50 workers. The same holds true for furniture and related products with 81% of their establishments employing 50 or less workers. Comparing sub-sectors within manufacturing D-Link The food product industry contributes the most to the state manufacturing GDP at almost 25% of the total. Food products made or processed in North Carolina include pickles, seafood, wine and tobacco products.  D-Link  D-Link North Carolina is home to 1,418 shops that make fabricated metal products, which is 13.5% of total manufacturing establishments. Furniture and related products is a close second with 10% of total establishments.  D-Link Three of the top five industry subsectors experienced a reduction in employee size from 2007 to 2008. Manufacturers are learning to do more with less. The global market requires manufacturers to be efficient and competitive. By applying advanced technology, manufacturers may experience a reduction in manpower. Secondly, based on a survey conducted by the NC Department of Labor, manufacturers report an 85% shortage of technically skilled employees. As the shortage of skilled workers continues or worsens and as the baby boom generation retires, manufacturers have no choice but to cope with the shortage. According to the National Bureau of Economic Research, the current recession began in 2007. Many economists believe the downturn ended in June of 2009, making it the longest slump since the Great Depression. These factors certainly need to be considered when analyzing the decline in employment and contributions to GDP. North Carolina was a furniture and textiles powerhouse for most of the 20th century. In the 21st century, food product manufacturers replaced furniture as the top employer in the state. However, with a workforce of 44,660, furniture and related products is a close second, accounting for 11% of total manufacturing employees. More than 135,000 workers work in furniture, food products or textile plants. Importance of small manufacturers D-Link Almost half of the manufacturing establishments employ nine or fewer employees in North Carolina. The largest establishments with more than 250 employees account for less than 5% of manufacturers.  D-Link Food manufacturing, textile mills and furniture establishments employ the most people within the manufacturing sector. This graph notes the impact that small companies have on our state. Fifty-four percent of furniture and related products companies have fewer than 9 employees. Manufacturing ExportsNorth Carolina exports manufactured products to countries around the globe. These products account for at least 98% of all exports. North Carolina ranks 15th in the nation in the value of its exports. Most North Carolina exports stay in the Western Hemisphere, with both Asia and Europe vying for the bulk of the remainder. Canada buys most of North Carolina’s exports by far, with China and Mexico trailing. The products of chemical manufacturers comprise more than 20% of the state’s exports, followed by machinery manufacturers.  D-Link North Carolina ranks 15th in the United States in world exports at approximately $23 billion, an increase of $7 billion from 2006.  D-Link  D-Link North Carolina exports a majority of its goods and services to North America with most coming from the manufacturing sector.  D-Link Of North Carolina’s total exports to Canada, 97% come from the manufacturing sector.  D-Link Chemical exports accounted for 21% of manufacturing exports as a whole, the largest single category. Chemical manufacturers transform organic and inorganic raw materials by a chemical process into products such as soaps and detergents, medicinal or botanical products, and fertilizers. Manufacturing TrendsFrom 1998 to 2008, the GDP of the United States climbed while the contribution from manufacturing remained stagnant. The same trend occurred in North Carolina, resulting in manufacturing declining as a percentage of the state’s GDP from 26.2% to 19.5% in that time. The finance and insurance industry, along with real estate sales, rental and leasing, grew the most over the last ten years. Within manufacturing, non-durable goods such as food products and chemical manufacturing experienced growth and higher contributions to GDP.  D-Link  D-Link The manufacturing contribution continues to rise with GDP.  D-Link Manufactured goods are categorized as either durable (expected to last at least a year) or non-durable. Non-durable goods, which typically last for less than one year, include paper manufacturing, food product manufacturing and chemicals. Durable goods include fabricated metal products, transportation equipment, furniture, computers and electronics. ConclusionAccording to the National Association of Manufacturers, U.S. manufacturing is the highest contributor to economic growth, higher than any other sector. Manufacturing is the engine of technology development and innovation, responsible for more than 70% of all business R&D, which ultimately benefits other manufacturing and non-manufacturing activities. Manufactured goods make up more than 60% of U.S. exports and manufacturing wages are approximately 25% higher than non-manufacturing jobs. Manufacturing achieves a high productivity rate year in and year out, increasing by more than 50% in the past decade. Manufacturing has a great multiplier effect on the rest of the economy as each manufacturing dollar generates an additional $1.37 in economic activity. Manufacturers deserve our support. Students need to consider manufacturing or engineering– "making something" – as a fulfilling career choice. Manufacturing remains a vital component of North Carolina’s economy. Manufacturing provides jobs for a majority of the state’s workforce. Small and medium-sized manufacturers are the cornerstone of the manufacturing sector. And manufacturing provides the products that the rest of the world wants to buy. Sources of Data
IES is the outreach function of North Carolina State University’s College of Engineering. We help new businesses grow and good businesses get better. We work with industries from the coast to the mountains, from 1,000 feet underground to 30,000 feet up, and we deliver results in quality, productivity, safety, environmental protection, energy management, and top-line growth. In 2008, working with IES typically offered a return on investment of $21 for every dollar spent by our client companies. IES is part of the Manufacturing Extension Partnership (MEP), a nationwide program that is part of the National Institute of Standards and Technology (NIST). With a network of MEP centers in every state and Puerto Rico, the program's purpose is to provide small and medium-sized manufacturers with the tools they need to succeed. In an independent survey conducted quarterly by MEP, clients reported that IES services have been worth more than $500 million in the first five years of the 21st century. By the end of 2010, IES strives to generate $1 billion in wealth for the state in a campaign called 1B4NC. If you have any suggestion, corrections, or need any assistance accessing the information on our site, please contact ies_services@ncsu.edu. Commercial or private sites linked from this page are intended only to supply information. No endorsement of products or firms is intended, nor is criticism implied of those not included.
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909 Capability Drive Suite 1600 Research IV Raleigh, NC 27606 Mailing Address: Campus Box 7902 Raleigh, NC 27695-7902 1-800-227-0264 |
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