September 01, 2012

Manufacturing: Awaiting Direction

Source: BLS

What does the graph convey?

Analysts watch the manufacturing sector as the job engine of the economy. It has the capacity to create jobs in volume, visibly and credibly through tangible goods that convey economic signals effortlessly and securely. We analyzed growth through multiple lenses to uncover the trends in manufacturing. Many analysts wish to see jobs created recently as “recovery”, as a throwback on 2007-9 period when major job-losses occurred. We analyzed top states also through maximum jobs created by numbers and as a percentage of total job-base in manufacturing. The graph shows percentage change in jobs in each state during ?rst half of 2012.

What to expect?

As the adjoining tables indicate, amongst the top states many areas are common for job losses during recession and recovery recently . Also, Tennessee, Texas, Ohio, and Illinois all ?gure amongst top destinations for manufacturing jobs added recently, in percentage as well as numerical terms. Cluster-based manufacturing hubs, housing, auto-giants, consumer durables and non-durables manufacturers, ancillary industries, and supporting sectors such as transportation and warehousing rise and sink together and have magni?ed job losses or gains.

As such the number of manufacturing jobs created in absolute terms in top states carries little signi?cance. Top job destination California has not made it to top 25 states in recovery list yet and has had 15% net job losses in manufacturing. If seen in light of installed base, a trend is not discernible yet. In the absence of trends, most citizens are taking small drifts as strong indicators, but we would advice caution and await a direction over the next year, after the elections and holiday season.