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Manufacturing News: 5 Boom Cities

grand rapids michigan manufacturing

What makes a manufacturing boom city? According to Joel Kotkin in Forbes, boom cities are those with the highest employment growth rates. Makes sense. Boomtowns become such because they explode with opportunity—from California gold to Texas oil and back to California silicon.

All five of the metro areas mentioned in this article appear in Kotkin’s article, “The Top 10 U.S. Cities Where Manufacturing is Thriving.” However, just because these boom cities have the greatest employment growth rates doesn’t mean they’re highest producing cities. In fact, only one of the cities mentioned in this list—San Diego—is located in a top five state for total manufacturing output (California has more than a $16 billion lead over Texas).

This investigation pursues why opportunity and optimism are peaking in five different U.S. metropolitan statistical areas (MSAs). We still make a lot of cool stuff in this country.

Manufacturing boom cities: San Diego

Osiris-Rex spacecraft bound for asteroid Bennu. Source: Asteroidmission.org

#5: San Diego, California

For my money, the best weather in the lower 48, which may be indirectly responsible for the 3,000+ manufacturing companies in the area. According to the San Diego Regional Economic Development Corporation, it’s proximity to Mexico helps, too. Manufacturing contributed nearly $8 billion in economic impact to the region in 2014 and accounts for 15 percent of all paid employment.

Why the good manufacturing news?

  • Aerospace Cluster: Aerospace manufacturing has had a strong presence in San Diego for decades. Two naval bases and a marine base are located in the area. The Pentagon recently awarded General Atomics Aeronautical Systems Inc. a $25.3 million contract to build four more Gray Eagle unmanned aircraft systems and satellite data terminals. That’s on top of a $317 million order for 30 Reaper unmanned aircraft that the U.S. Air Force placed in August.
  • Gateway to the Pacific: With a world-class port and heavy U.S. Navy presence, shipbuilding and ship repair jobs lead the robust maritime industry in the area.
  • Electronics manufacturing hub: Qualcomm, Sony and Kyocera are major contributors to an electronic instrument manufacturing sector that employed more than 10,000 people in 2014.

Popular projects:

  • Shipbuilding: General Dynamics NASSCO will build two Kanaloa class 870-foot long container ships to fulfill a $511 million contract from Matson Navigation Co. Inc. The shipbuilder also received a contract in June from the U.S. Navy to build six oilers, auxiliary ships that refuel combat ships at sea. That deal could be worth upwards of $3.1 billion.
  • Osiris-Rex spacecraft: Two San Diego businesses, Malin Space Science Systems and Vanguard Space Technologies Inc., built components for the spacecraft that will rendezvous with asteroid Bennu in 2018.
  • Vibrant life-sciences industry: The San Diego area is home to biotech luminaries such as Illumina and Ionis Pharmaceuticals (Carlsbad). Their manufacturing leadership is attracting start-ups that are breaking new ground in agribiotech, cancer therapies, genetic engineering and more.

Average hourly wage: $17.76

detroit michigan

Downtown Detroit

#4: Greater Detroit

Consisting of two metro areas (Warren-Troy-Farmington Hills and Detriot-Dearborn-Livonia), Greater Detroit has been the beneficiary of record auto sales in the U.S. for the past few years.

Why the good manufacturing news?

Interesting projects:

  • The Oakwood Group: This auto supplier will spend $5.2 million to expand operations and hire 50 employees.
  • Will Leather Goods: Hat manufacturing and e-commerce operations will relocate from Oregon to Detroit, bringing along 50 jobs over the next 18 months.
  • Wagoneer plans: Fiat Chrysler is bringing back the Jeep Wagoneer and Grand Wagoneer and may build them in Warren or, more likely, Detroit.

Average hourly wage: $20.36 (Detroit-Dearborn-Livonia); $17.87 (Warren-Troy-Farmington Hills)

ford super duty truck

Ford Motor Company makes its F-250 in Louisville. Source: ford.com

#3: Louisville, Kentucky

Situated on the Ohio River along the Indiana border, Louisville is Kentucky’s largest city. A hundred years ago it was an important shipping hub and better known as the birthplace of the Louisville Slugger and the Old Fashioned cocktail. Today it remains a vital transportation interchange, making it an attractive location for manufacturers from a variety of industries.

Why the good manufacturing news?

  • Diversified: In metro Louisville/Jefferson County, no two industries overlap for the area’s top five manufacturers, which include Samtec (connectors and cables), Brown-Forman Corp. (wine and spirits), Publishers Printing Co. LLC (commercial printer), GE Appliances and Ford Motor Company.
  • Strong commercial real estate market: Ford and UPS are investing hundreds of millions of dollars to expand their Louisville-area plants.
  • Ford F-Series sales are up: Ford is one of the largest employers in Louisville, so its good news for everyone that F-Series sales are up nearly seven percent over last year.

Interesting projects:

Average hourly wage: $17.36

#2: Elkhart, Indiana

Manufacturing jobs in the Elkhart-Goshen metro area account for nearly half (47.3 percent) of the local economy. Situated in the middle of a triangle created by Chicago, Grand Rapids and Indianapolis, this area is known as the “RV Capital of the World.” Manufacturers of boats, buses, van conversions and motor coaches are based in the area.

Why the good manufacturing news?

  • Job growth: From August 2014 to August 2015, Elkhart-Goshen added 4,811 jobs. Manufacturing employs more than 62,000 people in the area with trade, transportation and utilities a distant second, employing 19,700.
  • Peak RV sales: RV sales were higher in 2015 than in any year since 2006. That’s good news now for the RV Capital of the World, but dependence on the industry will cause issues when RV sales inevitably dip.
  • Expansion: Many manufacturers are expanding, including Dexter AxleMonogram Foods and Starcraft Bus.

Interesting projects:

    • Skyline Corporation: This manufactured housing provider opened its new Elkhart plant in May 2016.
    • Spartan Fleet Vehicles: By 2019, Spartan expects to invest $10.9 million and create 147 jobs to increase production of its walk-in vans and other vehicles.

  • Shield Restraint Systems: This seat belt company is relocating 40 jobs from its China plant to Elkhart while investing up to $11 million to expand its current facility.

Average hourly wage: $16.92

tall wood buildings

Wood Innovation Design Center (WIDC) / Michael Green Architecture (c) Ema Peter. Source: archdaily.com

#1: Grand Rapids, Michigan

Grand Rapids is the biggest boomer in the Rust Belt and in the U.S., thanks in large part to furniture (Steelcase and Herman Miller) and pharmaceuticals (Perrigo) manufacturing. Grand Rapids also has its fair share of automobile manufacturing plants.

Why the good manufacturing news?

  • Steady growth: While the auto industry is expected to slow down, Grand Rapids’ aerospace and office furniture companies will see continued growth through 2017.
  • Industrial workforce boost: From 2010 to 2015, the industrial workforce increased by 29 percent; by 5.4 percent in 2015 alone. According to MNI, Grand Rapids claims the most manufacturing jobs (55,216) in Michigan.
  • Lower industrial facility vacancy rate: Fewer existing industrial sites are available, making new construction a more likely option for new or expanding manufacturers in the region. It’s a positive indicator for a growing industrial market.

Interesting projects:

  • Stikwood: This reclaimed and sustainable wood planking manufacturer is investing $4.2 million to set up a new facility in Kentwood, Michigan.
  • Powder-coated wood innovation: Abcor Industries, one of Michigan’s 50 Companies to Watch in 2016, makes powder-coated wood components for furniture. Over the next five years, it expects to expand from 32 employees to 110 employees.
  • Tall wood buildings: To promote growth in manufacturing for the forest products industry, the Michigan Forest Biomaterials Institute may build a tall wood building in Grand Rapids. Tall wood buildings are higher than 10 stories and use engineered wood instead of concrete and steel.

Average hourly wage: $16.03

Boom City Ashes

It’s possible that five new cities will populate this list in a year. In a SmartAsset study examining income growth and disposable income as well as employment growth rates, none of the areas mentioned in this article ranked in the top 10 best places to work in manufacturing.

For now, though, it’s all good news for these five metro areas. The bitter pill is that production in some of these metro areas still doesn’t measure up to what once was. Without diversification, areas that depend heavily on one industry—such as Greater Detroit on the auto industry or Elkhart on the RV industry—are more volatile. Part of why they’re booming now is because they were huge busts not that long ago. Let’s hope that cycle doesn’t continue.

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