North Carolina has a leading, growing manufacturing economy despite declining employment trends over the past decade that reflect changes in what, and how, things are made. More than 442,000 full- and part-time employees worked in North Carolina manufacturing plants in 20131 and produced nearly $93 billion in output, up 18 percent in real terms from 2001.2 This made it the nation’s fourth largest manufacturing economy and trailed only California, Texas, and Illinois in size. Durable Goods manufacturing comprised all of the net growth and grew from 27 percent of manufacturing output in 2001 to 37.5 percent in 2013, while Nondurables made up almost two-thirds of production. At the same time, many Durable Goods industries captured a larger part of total state manufacturing production while gathering larger shares of their own industry’s U.S. output and employment. These helped to make North Carolina rank third in manufacturing output concentration as measured by Real Gross State Product — only behind Oregon and Indiana.
Since 2001, North Carolina’s manufacturers have increased production even as employment fell 37 percent. Of North Carolina’s leading manufacturing sectors in 2001, the top three employers experienced percentage job losses greater than their industries experienced nationwide: Textile Mills lost more than 70 percent, Furniture & Related Product lost more than half, and Computer & Electronic Product fell 42 percent. Food manufacturing was the only top industry to add jobs from 2001 to 2013. Many of these jobs were added in newly established bakeries, beverage companies, and food processing plants. The number of these food manufacturing establishments jumped by 50 percent from 2001, although the average number of workers per establishment declined. While all of the other top manufacturing industries shed jobs from 2001 to 2013, several bright spots appear when examining their subindustries. For example, employment in Aerospace Products & Parts manufacturing doubled; Iron & Steel Mills jumped by more than 80 percent; Household Appliances increased by more than 50 percent; Electronic Equipment rose 20 percent; and Medical Equipment grew 18 percent. Each of these subindustries paid wages significantly above the overall manufacturing average.3
North Carolina’s manufacturers have produced more while employing fewer workers, in part, because their products and processes have changed. Durable Goods industries that produce high value-added items like electronic parts, transportation equipment, medical equipment, and machinery produced 50 percent more than in 2001. At the same time, other industries lost thousands of jobs yet adapted to produce more per employee. In many cases, that meant employing highly-skilled workers to run efficient, advanced manufacturing processes in order to remain competitive. Combined, these things helped to bring about a level of manufacturing labor productivity in the state second only to Louisiana in 2011 (the most recent year that data is available).4
Footnotes:
1 Quarterly Census of Employment and Wages, Labor & Economic Analysis Division, North Carolina Department of Commerce. Bureau of Labor Statistics.
2 Real Gross State Product, U.S. Bureau of Economic Analysis
3 Quarterly Workforce Indicators, Bureau of Labor Statistics
4 Author’s calculations, Annual Survey of Manufacturers, U.S. Census Bureau.