2013 Manufacturing + LogisticsReports for the Maryland and Nation

October, 2013

B R O U G H T T O Y O U B Y :

Manufacturing Industry Health

To measure manufacturing we include three variables:

• Share of total income earned by manufacturing

employees in each state

• Wage premium paid to manufacturing workers

relative to the other states’ employees

• Share of manufacturing employment per capita

2013 ranking:

• Maryland scored a “D” grade in the manufacturing

industry category.

• Maryland is in bottom 10 states in the highest share

of manufacturing employment per capita and

highest manufacturing sector income share of the

total income.

Logistics Industry Health

To measure the logistics industry we include:

• Share of total logistics industry income as a share of

total state income

• Logistics employment per capita

• Commodity flows data by both rail and road

• Infrastructure spending as the per capita expenditure

on highway construction

2013 ranking:

• Maryland continued to hold an “D” grade in logistics

industry category.

• Maryland’s logistics employment per capita, commodity

flow value by road per capita and logistics share of

economy is in the bottom 20% of all states.

Human Capital

Our human capital measurements include these rankings:

• Educational attainment at the high school and collegiate

level

• First-year retention rate of adults in community and

technical colleges

• Number of associates degrees awarded annually on a per

capita basis

• Share of adults enrolled in adult basic education

2013 ranking:

• Maryland’s human capital grade dropped from “B-” to a

“C+”.

• Maryland is one among top 20% states with higher

percentage of population with bachelors degree and first

year retention rate in community and technical colleges.

Worker Benefit Costs

To measure worker benefit costs, we include:

• Health care premiums

• Long-term health care costs

• Workers’ compensation costs per worker

• Fringe benefits of all kinds as a share of worker

costs

2013 ranking:

• Maryland slightly dropped its worker benefit

rankings from “B” to “C+”.

• Maryland also experienced a marginal increase in

long-term health care and workers’ compensation

rate.

Tax Climate

To measure the tax climate we use data on:

• Corporate taxes

• Income taxes

• Sales and use taxes

• Property taxes

• Unemployment insurance tax

2013 ranking:

• Maryland slightly dropped its rankings from “D+” to “D”

grade in tax climate category.

• Maryland is among the bottom 20%, relative to other

states, for individual income tax, unemployment

insurance tax and property tax indexes in fiscal year 2013.

• Does not include 2013 legislative changes

Expected Fiscal Liability Gap

To measure the expected fiscal liability gap, we include:

• Data on unfunded liability per capita

• Percentage of GDP, average benefits, and bond

rankings

2013 ranking:

• Maryland saw a steady “C” grade in expected fiscal

liability gap category.

• Maryland holds on to a first place in bond ratings.

• Maryland’s average benefits and unfunded liability

as a percentage of GDP increased relatively.

• This does not yet capture payments to our

pension funds since 2011.

Global Reach

To measure global reach we include:

• Export-related measures of per capita exported

manufacturing goods.

• The growth of manufacturing exports

• Foreign-direct investment measures of the amount of

manufacturing income received annually from foreign-

owned firms

• The reach of foreign-direct investment

2013 ranking:

• Maryland continued to remain weak with an “D” grade

in global reach category.

• Maryland’s per capita manufacturing exports is in the

bottom 10% of all states.

Sector Diversification

In this section, we measure the diversification

of manufacturing activity in each state using

the Herfindahl-Hirschman Index

2013 ranking:

• Maryland grades stood at “C-” in this

category.

• Maryland experienced a marginal change

in diversification index.

Productivity + Innovation

To measure productivity and innovation we use:

• Manufacturing productivity growth

• Industry research and development expenditures

on a per capita basis

• The per-capita number of patents issued annually

2013 ranking:

• Maryland’s grade continued to remain steady

with “B” in this category.

• Maryland saw a relative growth in manufacturing

value added (a measure of the contribution of the

production process in an individual state) and

average manufacturing productivity.

Maryland’s Scorecard

Category Maryland DE NJ PA VA WV

Manufacturing D D C- C D C-

Logistics D F C+ A C- C

Human Capital C+ C- C+ C C F

Benefit Costs C+ F D D+ C D-

Tax Climate D B F D C C

Expected Fiscal Liability Gap C A D C C F

Global Reach D B B C C B

Diversification C- C D- B A C-

Productivity & Innovation B C B- C B D