Tuesday, June 05, 2012

More on the Midwest Manufacturing Renaissance

From Chmura Economics, an analysis of the Midwest manufacturing boom, with lots of good micro-level data, here's the opening:

"Last year may well mark the beginning of a welcome, several-year expansion in the manufacturing sector. This manufacturing expansion has driven a good portion of the improving jobs picture across the Midwest over the past year. In 2011, manufacturers in the Midwest added over 113,000 jobs. In the same year, more than 63 separate manufacturing industries expanded employment, of which more than 30 added 1,000 or more jobs. Food-oriented manufacturers in the Midwest fared better than national counterparts, expanding employment over the past five years despite the Great Recession. A premier site selection group, Biggins Lacy Shapiro & Company, and Moody’s Analytics have found that the Midwest has improved cost competitiveness compared to the rest of the U.S., according to a recent Wall Street Journal article. Overall, Midwest manufacturers seemed to be turning a corner and positioned for further expansion."


At 6/05/2012 5:48 PM, Anonymous Anonymous said...

Off-topic but ...

First there was the Bakken in North Dakota, Montana and Saskatchewan.

Then there was the Eagle Ford in south Texas.

Following that has been similar ones in Ohio, Oklahoma, west Texas, Kansas, Colorado and Wyoming, Alberta and who knows where else.

But anyone thinking these things would just be found in North America is kidding themselves. Recently there was one announced in Argentina, but ... hold on just a second ... I've been waiting to hear about this next one for, like, 3 years. Or more ...

... Meet The Oil Shale Eighty Times Bigger Than The Bakken

At 6/06/2012 9:06 AM, Blogger morganovich said...

alas, it seems that somehting is derailing this.

"U.S. Productivity Fell 0.9% in First Quarter as Growth Cooled
By Alex Kowalski - Jun 6, 2012 6:30 AM MT

The productivity of U.S. workers fell more than initially estimated in the first quarter as labor costs climbed, indicating companies may pause before bringing on new employees.

The measure of employee output per hour decreased at a 0.9 percent annual rate, after a 1.2 percent gain in the prior three months, revised figures from the Labor Department showed today in Washington."

this goes some way toward explaining the sudden drop in hiring.

and this the economic slowdown.

a 2% drop in real wages is a stiff headwind, especially after a drop in q4 as well.

Wages and salaries rose by $28.9 billion in the final three months of 2012, less than the $89.1 billion gain previously reported, the Commerce Department said May 31.

The gain in first-quarter output was the smallest in a year and followed a 3.7 percent gain in the fourth quarter, the revised figures showed.

Hours worked increased at a 3.3 percent pace from January through March, more than first estimated, after a 2.4 percent rise in the prior quarter. Compensation for each hour worked climbed at 0.4 percent annual pace.

Adjusted for inflation, compensation dropped at a 2 percent pace last quarter, following a 1.6 percent decrease in the previous three months.

the key reason that this diverges so far from reported GDP is it uses CPI as a deflator. the gdp-d has been running dramatically below CPI for the last 3 q's. deflate gdp with CPI, and we have been at a dead stall for 2 q's.

At 6/06/2012 3:07 PM, Blogger VangelV said...

Great. What we need is more investment in capital that supplies industries that are insolvent.

I think that people are forgetting that the multiplier works both ways. GM's suppliers can only produce so much before the 86 days of inventory gets in the way. And those drillers can only add so much debt before they have to recognize the consequences of the reality of the marketplace.


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