ANDERSON — Although Indiana is slowly inching its way back to the top as one of the country’s top manufacturing powerhouses, a new study shows that doesn’t mean the Hoosier state is getting any more productive.
Although three of the top 10 metropolitan areas in the country with the highest concentration of manufacturing jobs are in Indiana, according to a study released by Garner Economics, Indiana is not in the top 10 for most productive determined by Gross Regional Product per worker.
Anderson would seem to defy the trend, however, as it is in a metropolitan area that ranks 13th nationally in productivity of 344 locations studied. But Carmel and Indianapolis are in the same region. And as home to high-tech industries, they likely skew the numbers for the rest of the region.
In contrast, the Elkhart-Goshen area, which is strong in the RV industry, has the highest concentration of manufacturing jobs in the country but it ranks third from the bottom in per-worker production.
The disparity between areas of high concentration and areas of high productivity is based on the fact that high-tech industries employ fewer people than areas such as traditional automotive manufacturing. High-tech companies also tend to make high-priced goods.
The second area of high-production manufacturing is the oil and gas industry, according to the study.
Those areas with high concentration but low productivity focus on durable goods that require more people to create less-profitable products.
“Many of these regions produce heavy durable goods such as automobiles, furniture, and carpeting that, even with greater automation, are still more labor intensive than other types of goods,” author of the study Jay Garner, president of Garner economics, said.
The data, based on data from the Bureau of Labor Statistics, also revealed that although employment in the sector fell by about 20 percent between 2000 and 2015, the average U.S. worker’s contribution towards GDP nearly doubled over the same 15-year period.
“Automation played a key role in this dramatic increase,” Garner wrote in the study. “With more efficient manufacturing processes fewer workers are needed to produce the same amount of goods.”
Now that manufacturing employment is on the rebound, the sector added 800,000 jobs between 2010 and 2015, according to the BLS, those exponential increases in per-worker productivity have seemed to come to a crawl with productivity only increasing by about 8 percent in the same timeframe.
“The lack of recent growth in manufacturing productivity should be a major concern for cities and regions around the country,” Garner said. “(Because) it is a critical component of profitability in manufacturing companies.”