4 Reasons Why Manufacturing Is Resurging in the Midwest

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In 2017, the Center for American Progress described the Midwest as a region “left behind by the economy” thanks to “globalization, the decline of manufacturing, and the growing economic dominance of coastal metropolises.”

Further analysis from the institute concluded that the loss of millions of manufacturing jobs was most likely the prime cause of the economic crisis in the region. Indeed, in 2010, the Midwest had 9.3% fewer workers than at the beginning of the decade and had earned itself the moniker the “Rust Belt,” which refers to the region’s ongoing loss of factory jobs. Between 2000 and 2016, the US lost a whopping five million manufacturing jobs, of which 1.5 million were in the Midwest.

Several factors have contributed to the deindustrialization of Midwestern states over the past couple of decades. This ranges from the decline of the auto industry and unwelcome trade liberalization policies, to international trade disputes, wage stagnation, and the rise of offshoring.

While many presumed the manufacturing industry would never again boom in the Midwest, data collected in recent years seems to suggest otherwise.

The Resurgence of Manufacturing In the Midwest

In the past few years, US manufacturing has been steadily on the rise-a shift that appears to have been particularly beneficial to Midwestern states.

In 2018, it was reported that the Midwest claimed six out of the top 10 cities where manufacturing was thriving the most. At the time, states in this region had both a higher number of firms and higher employment rates per state. Today, manufacturing production jobs are more concentrated in the Midwest than in any other region, and manufacturing is the largest industry in all Midwestern states bar North Dakota and South Dakota.

We know that evolving and ultimately more cost-effective processes, digital transformation, increased government investments, a shift in focus to “buying Americans,” and ongoing supply chain risks, have driven many organizations to reshoring their operations. But why are they choosing to relocate to the Midwest?

1. Friendly Residents

By and large, the Midwest is a nice place to live and work, with Midwesterners themselves being renowned for their hospitable, kind, and friendly nature. A University of Cambridge study surveyed 1.6 million US citizens who selected the title “Friendly and Conventional Region” for the Midwest.

For this reason, the region is a good place for industrial businesses to establish their manufacturing hubs. Employers can expect to recruit supportive, hard-working, happy, and well-meaning employees, who value their local community.

2. Affordability

The cost of running a business in metropolitan areas within the Midwest is markedly lower than elsewhere in the United States, namely the most popular regions on the East and West Coasts. Reduced warehousing, transportation, staffing, and living costs mean organizations can drive higher profit margins and improve their bottom line.

3. Location

As well as being located in the middle of the country, which offers convenient access to the rest of the US, the Midwest boasts fantastic transportation infrastructure. This includes a great railway system, connecting waterways, several major airports, and some of the US’s largest highways, which provide manufacturing organizations with a variety of shipping options to enable fast and reliable product distribution.

4. Talent

Several top universities are based in the Midwest, including Washington University in St. Louis, Northwestern University in Chicago, the University of Wisconsin-Madison, and Oberlin College in Ohio.

In this region, manufacturing roles pay better than other jobs for those with a high school diploma. In addition, the industry offers many opportunities for non-degreed workers to attain specialist skills.

This is a region where manufacturers can attract both highly skilled and motivated employees by offering them competitive salaries and opportunities for career progression. As a bonus, doing so has historically strengthened Midwestern communities and made them more equitable in terms of race.

What Are the Top Manufacturing Industries in the Midwest?

Certain industries have long been associated with the Midwest, namely food production and the automotive industry. Wisconsin, for example, is the number one cheese-producing state, making a whopping 26% of all the country’s cheese. Michigan, meanwhile, houses 96 of the top 100 automotive suppliers to North America, including General Motors, Ford Motor, and TRW Automotive Holdings.

But the Midwest supplies the US with much more than cheese and automobiles.

The number one industry in the region is the manufacturing of production technology and heavy machinery. Items commonly produced in the Midwest include metal products, motor homes and appliances, metalworking technology, and downstream chemical products.

Let’s also examine a few individual states. In Missouri, for example, the largest industries include aerospace, chemicals, and electrical equipment. In Illinois, which is home to several huge corporations like Boeing, Walgreen, Abbott Laboratories, and Caterpillar, some of the biggest industries are agriculture, energy, and biotechnology.

Ohio is often described as the industrial capital of the United States, contributing to the agricultural, bioscience, aerospace, motor vehicle assembly, and iron and steel industries. Every year, the state produces more than 14 million tons of steel, which generates about $7.2 billion. This accounts for approximately 15% of the raw steel produced in the United States.

Whichever way you cut it, this region has much to offer.

What Does the Future Hold for Manufacturing in the Midwest?

Despite advancements in the manufacturing industry in the Midwest, wages have dropped steadily in recent years and jobs continue to be lost. To combat this, the industry will need to create more long-lasting and well-paid positions that ultimately support core Midwest sectors, like steel and heavy equipment. Biden’s administration could help to achieve this by continuing to make large-scale investments in infrastructure and implementing additional Buy America provisions.

Image Credit: dotshock / Shutterstock.com

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