October is Ohio Manufacturing Month
Ten years ago pundits were saying that manufacturing was dead in America, and that we don’t need manufacturing jobs. They were wrong then, and are even more wrong today. That’s great news for Appalachian Ohio.
Why do we need manufacturing? Manufacturing is one of three or four industries that economists say create all the world’s wealth. The others are agriculture (including forestry), extraction (mining and drilling) provided you minimize environmental damage, and possibly some cutting edge IT work. All other industries just move around the wealth these industries create. Since you only have so much land and minerals and high-end IT is hard to do in rural areas, most rural areas must focus on manufacturing to build their economies.
Isn’t manufacturing declining in America? Not at all. We certainly did export a lot of our manufacturing jobs in the 70’s, 80’s and 90’s, but by 2000 we were beginning to see that reverse. We manufacture more products in America today than we ever have in our history, and that is increasing every year. Hundreds of firms are now rethinking where they make things and choosing America.
Why is manufacturing coming back now? In the 70’s when manufacturing began moving offshore, labor was more than half the cost of manufactured goods. Energy, including transportation fuel, was just 15 percent.
With rising global energy prices and increased productivity, today that’s reversed. It no longer makes sense to ship raw materials halfway around the world for cheap labor, then ship the finished products back. Plus, America now has the world’s cheapest energy outside the Middle East. America is now the most cost-efficient place in the world to produce many manufactured goods.
How is this good news for Appalachian Ohio?
• We still know how to make things! One in seven workers is employed in manufacturing, compared to one in ten in Ohio – and Ohio has the third highest rate in the nation.
• Our manufacturing workforce is highly skilled compared to much of America. We are attractive to firms needing skilled workers.
• Our workers are right-priced. At about 80 percent of the Midwestern average our wages are a real bargain for firms looking for a new location.
• We are in the right place and have great transportation options. You can reach 60 percent of North America’s markets with one truck driving shift. We also have great railroad service and the Ohio River’s barges offer an ultra-low cost shipping option.
That’s why APEG’s economic growth strategies focus on manufacturing. It’s the one place where we can do the most to build a more prosperous economy for the region and all who live here.
From ASSETS –2015 Q3
