strengths of tennessee’s

The State of

Manufacturingin Tennessee

Prepared by Matthew N. Murray

Center for Business and Economic ResearchThe University of Tennessee

November 8 2005 M.N. Murray, Center for Business and Economic Research, The University of Tennessee, Knoxville

2

Strengths of Tennessee’s Manufacturing Sector

A key foundation of the state's economic base and exports; competitiveness

Supports state and local tax bases One of six dollars of state GSP from mfg Higher likelihood of workers receiving health

insurance than in other sectors Workers receive an above-average wage Civic involvement of firms and workers New jobs are still being created!


3

15000

20000

25000

30000

35000

40000

45000

50000

2001 2002 2003 2004

Mining

15000

20000

25000

30000

35000

40000

45000

50000

2001 2002 2003 2004

Construction

15000

20000

25000

30000

35000

40000

45000

50000

2001 2002 2003 2004

Manufacturing

15000

20000

25000

30000

35000

40000

45000

50000

2001 2002 2003 2004

Trade, Transportation, Utilities

15000

20000

25000

30000

35000

40000

45000

50000

2001 2002 2003 2004

Information

15000

20000

25000

30000

35000

40000

45000

50000

2001 2002 2003 2004

Financial Activities

15000

20000

25000

30000

35000

40000

45000

50000

2001 2002 2003 2004

Professional & Business Services

15000

20000

25000

30000

35000

40000

45000

50000

2001 2002 2003 2004

Educational & Health Services

15000

20000

25000

30000

35000

40000

45000

50000

2001 2002 2003 2004

Leisure & Hospitality

15000

20000

25000

30000

35000

40000

45000

50000

2001 2002 2003 2004

Other Services

15000

20000

25000

30000

35000

40000

45000

50000

2001 2002 2003 2004

Government

Average Annual Wage by Industry (2000 $)

Mining Construction Manufacturing Trade, Trans, Utilities

Leisure & Hospitality Other Services Government

Information Financial Activities Professional & Business Education & Health


4

Nonfarm Job Growth, Tennessee and U.S.

-4.00

-2.00

0.00

2.00

4.00

6.00

91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07

Tennessee

U.S

Perc

enta

ge c

hange, s

am

e q

uarter, la

st y

ear


5

Mfg Job Growth, Tennessee and U.S.

-10.00

-8.00

-6.00

-4.00

-2.00

0.00

2.00

4.00

91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07

U.S.

Tennessee

Perc

enta

ge c

hange, s

am

e q

uarter, la

st y

ear


6

Services Job Growth, Tennessee and U.S.

-4.00

-2.00

0.00

2.00

4.00

6.00

8.00

10.00

91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07

Tennessee

U.S.

Perc

enta

ge c

hange, s

am

e q

uarter, la

st y

ear


7

Educ & Health9.5%

Other Services

2.6%


8.2%

Financial, Info, Prof & Bus Servs

14.7%

Govt16.0%

Trade, Trans, Util

21.9%

Mfg22.5%

Const, Mining4.6%

Other Services

3.9%

Mfg16.2%


18.4%

Educ & Health10.0%


8.5%Trade,

Trans, Util20.7%

Const, Mining5.5%

Govt16.8%

Distribution of Nonfarm Jobs: 1990

United States Tennessee


8

Educ & Health11.9%

Const, Mining4.6%

Mfg15.1%

Trade, Trans, Util

21.8%

Govt15.2%


18.3%


9.4%

Other Services

3.8%

Mfg10.8%

Other Services

4.1%


21.1%

Educ & Health13.0%


9.5%

Trade, Trans, Util

19.3%

Const, Mining5.8%

Govt16.3%

Distribution of Nonfarm Jobs: 2005

United States Tennessee


9

Mfg Employment as a Percentage of Total Nonfarm Employment

Less than 7.0% 7.0% to 10.9% 11.0 to 19.9 20.0% or greater

1990 2004

Source: Bureau of Labor Statistics.


10

Tennessee Manufacturing Jobs: 2005

Durables62.1%

Nondurables37.9%

Durables Wood Nonmetallic Minerals Primary Metals Fabricated Metals Machinery Computer & Electronics Electrical Equipment Transportation Equipment Furniture Miscellaneous durables

Nondurables Food Beverage & Tobacco Textile Mills Textile Mill Products Apparel Paper Printing Chemicals Plastics & Rubber Miscellaneous nondurables


11

Tennessee Manufacturing Jobs: 2005

Wood6.9%Machinery

13.4%

Trans Equip24.5%

Misc.6.4%

Computer, Electronics

4.3%

Fab Metals16.4%

Furniture7.8%

Primary Metals4.8%

Electrical Equip9.1%

Nonmetal Minerals

6.3%Food22.5%

Beverage, Tobacco

3.8%

Paper11.8%

Textile Mills4.1%

Printing12.2%

Chemicals17.4%

Apparel5.4%

Plastics, Rubber18.4%

Misc.1.9%

Textile Mill Prods2.6%

Durables Nondurables


12

TN Durables & Nondurables Employment

150

170

190

210

230

250

270

290

310

1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002

Durables SIC Nondurables SIC

Durables NAICS Nondurables NAICS

emp

loym

ent

(th

ou

san

ds)

Source: Bureau of Labor Statistics and CBER.


13

Mfg Employment as a Percentage of Total Nonfarm Employment: 1960 to 2004

10.0

15.0

20.0

25.0

30.0

35.0

40.0

1960 1965 1970 1975 1980 1985 1990 1995 2000

TN SIC

US SIC

TN NAICS

US NAICS

2004

Source: Bureau of Labor Statistics.


14

TN Output Shares in Durables, Nondurables, Trade and Services

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0

22.0

24.0

65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 01

Perc

ent

Durables Nondurables Services Trade


15

Tennessee Gross State Product by Industry: 1997 and 2003.

Educ & Health9.0%

Other Services

2.7%Leis & Hosp

4.1%


29.2%

Govt12.2%

TTU20.7%

Mfg17.4%

Ag, Const, Mining4.8%

Other Services

2.8% Mfg16.2%


26.5%

Educ & Health8.2%

Leis & Hosp4.1%

TTU21.1%


Govt11.4%

1997 2003

Source: Bureau of Economic Analysis

Educ & Health9.0%

Other Services

2.7%Leis & Hosp

4.1%


29.2%

Govt12.2%

TTU20.7%

Mfg17.4%


Other Services

2.8% Mfg16.2%


26.5%

Educ & Health8.2%

Leis & Hosp4.1%

TTU21.1%


Govt11.4%

1997 2003

Source: Bureau of Economic Analysis


16

3.0%

3.5%

4.0%

4.5%

5.0%

5.5%

6.0%

6.5%

7.0%

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Tennessee

U.S.

Southeastern states

Mfg Establishments as a Share of Total Establishments

pe

rce

nta

ge

Source: County Business Patterns.


17

40

45

50

55

60

65

70

75

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Tennessee

U.S.

Southeastern states

Mfg Employment per Establishment: 1988–2003

em

plo

ye

es


18

Manufacturing in the Southeast: 2003

StateManufacturing

employees EstablishmentsShare of manufacturing

establishments

Jobs per manufacturingestablishment

Alabama 279,074 4,980 5.0 percent 56

Arkansas 208,843 3,127 4.9 percent 67

Florida 369,754 14,750 3.2 percent 25

Georgia 449,486 8,652 4.1 percent 52

Kentucky 260,951 4,202 4.6 percent 62

Louisiana 149,603 3,459 3.4 percent 43

Mississippi 172,618 2,706 4.5 percent 64

North Carolina 591,566 10,527 5.1 percent 56

South Carolina 283,244 4,321 4.4 percent 66

Tennessee 393,832 6,824 5.3 percent 58

Virginia 308,571 5,841 3.2 percent 53

West Virginia 69,610 1,442 3.6 percent 48

United States 14,132,020 341,849 4.7 percent 41


19

Mfg Establishments in Tennessee

1998 2003 ChangePercentchange

7,376 6,824 -552 -7.5%Food 359 364 5 1.4%Beverage & Tobacco Products 54 68 14 25.9%Textile Mills 98 81 -17 -17.3%Textile Product Mills 154 138 -16 -10.4%Apparel 330 197 -133 -40.3%Leather & Allied Products 40 37 -3 -7.5%Wood Products 636 590 -46 -7.2%Paper 163 154 -9 -5.5%Printing & Related Support Activities 844 762 -82 -9.7%Petroleum & Coal Products 53 56 3 5.7%Chemical 285 282 -3 -1.1%Plastics & Rubber Products 392 345 -47 -12.0%Nonmetallic Mineral Products 378 376 -2 -0.5%Primary Metals 143 135 -8 -5.6%Fabricated Metal Products 1171 1158 -13 -1.1%Machinery 558 504 -54 -9.7%Computer & Electronic Products 190 143 -47 -24.7%Electrical Equipment, Appliance, & Components147 140 -7 -4.8%Transportation Equipment 316 310 -6 -1.9%Furniture & Related Products 552 450 -102 -18.5%Miscellaneous 513 534 21 4.1%

SectorManufacturing


20

Manufacturing Establishmentsper County, 2003

Source: U.S. Census Bureau, County Business Patterns.


21

Average Employment per Manufacturing Establishment, 2003

Source: U.S. Census Bureau, County Business Patterns.


22

Manufacturing Employment as a Percentage of Total Private Employment, 2003

State average = 18.6%

Less than or equal to 18.6%

18.6% to 40.0%Greater than 40.0%

Not disclosed


23

Less than 9.6% 9.6% to 16% Greater than 16%

Educational Attainment of Persons 25 Years and Older:Percent with Less than a 9th Grade Education, 2000

TN Average = 9.6% U.S. Average = 7.5%


24

Projected Growth in TN Mfg Jobs: Nondurables

-10.0

-8.0

-6.0

-4.0

-2.0

0.0

2.0Fo

od

Bev

erag

e,To

bac

co

Tex

tile

Mill

s

Tex

tile

Mill

Pro

ds

App

arel

Pap

er

Pri

nting

Chem

ical

s

Pla

stic

s,R

ub

ber

Mis

c.N

on

dura

ble

s

2006

2007

perc

enta

ge

Source: CBER.


25

Projected Growth in TN Mfg Jobs: Durables

0.0

0.5

1.0

1.5

2.0

2.5

3.0W

ood

Non

met

allic

Min

eral

s

Pri

mar

y M

etal

s

Fab

rica

ted

Met

als

Mac

hin

ery

Com

pute

r,E

lect

ronic

s

Ele

ctri

cal

Equip

Tra

ns

Equ

ip

Fu

rniture

Mis

c. D

ura

ble

s

2006

2007

perc

enta

ge

Source: CBER.


26

Center for Business and Economic Research

Web address: http://cber.bus.utk.edu