Transportation Equipment Manufacturing on the Rebound and Tennessee is the Big Winner

From 2001 to 2009, pretty much every manufacturing sector — everything from apparel manufacturing (down 254,000 jobs, -58%) to machinery manufacturing (down 343,000 jobs, -25%) to wood product manufacturing (down 215,000 jobs, -36%) — took a tremendous beating. The economy still hasn’t recovered these losses. And to most appearances, it never will.

However, when we look at EMSI data in the years immediately following the downturn (2010-2013), the picture changes a bit. It’s not exactly rosy, but there are a few green springs.

Sectors like apparel manufacturing remain down (it lost another 16,000 jobs 2010-2013), although in places like Los Angeles it is still heavily specialized. Wood products haven’t bounced back, but at least they are holding steady (a 1% increase in three years). Machinery manufacturing actually gained 113,000 jobs (11%) from 2010 to 2013.

Of greatest note is a surprising sector that actually grew by 13% and gained nearly 200,000 new jobs since 2010.

Any guesses?

If you thought transportation equipment manufacturing, you got it right. After losing 29% of its workforce (an enormous 570,000 jobs) from 2001 to 2009, the industry, which is comprised of motor vehicles, motor vehicle parts, aerospace products, railroad stock, and ship and boat building, has since piled on some 173,000 jobs.

Let’s take a closer look at the decline and recovery in the different industries within this sector.

Motor vehicle parts manufacturing, the largest sector in our group, took the hardest hit 2001-2009, dropping from  770,000 to 417,000 — a loss of more than 350,000 jobs (-46%).

Similarly, motor vehicle manufacturing, which is much smaller in terms of employment, dropped by 44%, shedding 122,000 jobs.

Railroad stock and motor vehicle body and trailer manufacturing took the next heaviest losses (-19% and -34%, respectively). They are also smaller employment sectors, so the total numbers were not as large (-60,000 jobs between the two).

Aerospace products and parts declined by 19,000 jobs (-3%) from 2001 to 2009.

From 2010 to 2013, motor vehicle part manufacturing grew 20% with 84,000 jobs. This increase doesn’t nearly make up for the huge loss of the previous years, but it’s definitely a move in the right direction. Motor vehicles manufacturing (18%) and motor vehicle body and trailer manufacturing (21%) also rebounded, adding some 52,000 jobs in three years.

Aerospace products and parts  grew by 5% and added 23,000 jobs — more than making up for the 19,000 jobs it lost. The workforce is now close to 500,000, just 7,000 fewer than what it was in 2001.

The fastest growth has occurred in the railroad stock manufacturing sector. In three short years, the workforce grew by an impressive 36%, adding 6,500 jobs to total 25,000. As a result, the total workforce is only 3,000 fewer what it was in 2001.

Ship and boat building grew by 6%, adding 7,200 jobs.

Regional Look

So, what regions are doing the best with regard to these transportation manufacturing jobs?

Tennessee is the clear leader. From 2010 to 2013, its workforce jumped from 40,000 to 60,000 jobs — 50% growth. This growth was primarily driven by:

• 7,000 new jobs in motor vehicle body and trailer manufacturing (750%)
• 9,000 new jobs in motor vehicle parts manufacturing (33%)
• 3,300 new jobs in motor vehicle manufacturing (43%)

In addition to that, manufacturing jobs related to transportation equipment manufacturing are now twice as concentrated in Tennessee as compared to the national average. The screenshot below from Analyst, EMSI’s labor market analysis tool, provides some more perspective on the industry’s growth in the state:

It’s also interesting to note how well this boom is distributed across the state, with many counties sharing in this great job growth. Below is a look at of the top counties for these jobs:

Which other states show the strongest growth for transportation manufacturing jobs? 

Illinois gained nearly 11,000 jobs and grew by 34%. South Carolina, Idaho, South Dakota, Kentucky, Michigan, Alabama, New Jersey, Virginia, North Dakota, Indiana, and Washington all experienced growth of 20% or more. Michigan, which has by far the largest workforce related to these industries (164,000 jobs), added 33,000.

But not every state has grown. New York and Louisiana actually lost sizable portions of their transportation manufacturing workforce from 2010 to 2013. New York is down 3,700 jobs (-16%) and Louisiana down 3,700 jobs (-23%).

Another curious fact is that states with the highest earnings per worker are also states that are not gaining jobs. This includes Arizona ($113,000, 0% growth), Connecticut ($118,000, -2%), California ($106,000, -3%), Colorado ($116,000, -3%), and Massachusetts ($126,000, -4%). Perhaps these states are losing jobs to Tennessee?

The only growing state with average annual wages above $100,000 per worker is Washington, which has expanded 20%. Thanks largely to Boeing, Washington’s growth is being driven by aerospace products and parts manufacturing, the highest-paying transportation manufacturing sector.

Data and analysis for this post comes from Analyst and EMSI’s 2013.3 dataset. If you have questions or would like to learn more, please contact us. Follow EMSI on Twitter @desktopecon.