The Changing Geography of US Manufacturing

August 01, 2019

The evolution of manufacturing across the American landscape has involved three connected trends in manufacturing: a decline in share of economic output as the role of services in the economy grew; a decline in share of the workforce; and a rise in output per worker that has allowed manufacturing to increase its overall output even as its relative importance in the economy and share of the workforce have fallen

Between 1940 and 2016, employment in manufacturing shifted across America from the Northeast to the Midwest and the Southeast. The industry lost ground in many places and is now the largest employer in only two states—Indiana and Wisconsin. In 1940, 23% of workers were employed in the manufacturing industry, and they were concentrated in 15 northeastern, mid-Atlantic, and Great Lakes states. As the economy shifted toward services at the beginning of the new millennium, the share of employment in manufacturing declined to less than 15%. In 2000, the industry was the largest employer in 18 primarily southeastern and central states. Increased foreign trade and offshoring contributed to continued industry job losses, and by 2016, the share of employment in manufacturing hovered at 10%.

Source: 
Georgetown University