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Manufacturing Employment: Who are the Winners and Losers at the State Level?

Since 1979 no recovery has regained manufacturing employment lost in the previous recession at the national level.
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US Manufacturing Employment in Thousands 2021-05A

Manufacturing Headed Southwest?

Here is a detailed analysis of manufacturing employment at the state level, investigating the Wall Street Journal claim The Southwest Is America’s New Factory Hub. ‘Cranes Everywhere.’

Companies producing everything from steel to electric cars are planning and building new plants in Southwest states, far from historical hubs of American industry in the Midwest and Southeast. The lure is open land, local tax breaks and a growing supply of tech-savvy workers.

The Southwest, comprising Arizona, New Mexico, Texas and Oklahoma, increased its manufacturing output more than any other region in the U.S. in the four years through 2020, according to an analysis by The Wall Street Journal of data from the Bureau of Economic Analysis.

Those states plus Nevada added more than 100,000 manufacturing jobs from January 2017 to January 2020, representing 30% of U.S. job growth in that sector and at roughly triple the national growth rate, according to data from the Bureau of Labor Statistics.

The WSJ article had no charts so I downloaded lots of BLS data and made some. The state level data starts in 1990. 

Manufacturing Employment in Thousands 12 states 

Manufacturing Employment in Thousands 12 states 2021-05

I included the top 12 manufacturing states in the above chart. The pattern looks the same but it is a tangled mess of lines. 

Since the WSJ measured from 2017 let's hone in there. 

Manufacturing Employment in Thousands 12 States Detail 

Manufacturing Employment in Thousands 12 states Detail 2021-05

The pattern still is not clear and the selection of 2017 as a starting date is arbitrary. Nonetheless let's have look at changes. 

Manufacturing Employment Change in Thousands 2017 Look

Manufacturing Employment Change in Thousands 2017 Look

Texas is a big winner from 2017 until 2020 but that timeframe is more than a bit arbitrary.

The St Louis Fed data repository does not have monthly data for New Mexico (manufacturing is extremely tiny), but the annual data suggests a miniscule employment gain of 400. 

Let's expand the date ranges a bit.  

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Manufacturing Employment Change in Thousands Select Dates

Manufacturing Employment Change in Thousands Select Dates 2021-05

That chart provides a still better look at what's going on. 

1990-08-01 is a pre-recession peak as is 2008-01-01. 2009-07-01 is the end of the great recession.  

Clearly some states are far more stable than others. Let's hone in on that idea with a detailed look at pre-recession peaks and post-recession recoveries.

Manufacturing Employment Change in Thousands start and end of recessions 

Manufacturing Employment Change in Thousands start and end of recessions 2021-05

The above chart is the best visual representation of what's happened over time.

Texas, Arizona, Oklahoma, Wisconsin, and Indiana have been relatively stable. Nevada is the one true winner, albeit from a very low starting point. 

Stability is no doubt due in part to the type of manufacturing. Weapons production is certain to be more stable than car or furniture production. 

North Carolina is the leading state in furniture and apparel manufacturing. Oops.

The high tax states (California, Illinois, and New York), plus the big auto states lead the decline. 

There is undoubtedly a big exodus underway but the recent winners are not Southwest in general but rather Texas, Arizona, and Nevada specifically. 

Overall, since 1990, the winners are those who lost the least. Looking ahead, Texas, Arizona, and Nevada may indeed be the winners, but the picture as detailed above is far more complex.


This post is sure to bring howls against NAFTA but the claim is false.

Productivity is rising everywhere and there is a bit of Nixon history in play too.

For discussion, please see Disputing Trump’s NAFTA “Catastrophe” with Pictures: What’s the True Source of Trade Imbalances?