NC State Economist Dr. Mike Walden – Where Are the Factories Located?
When we think about the history of our country and manufacturing, many of us think about the big steel mills and auto factories in the north and Midwest. Or of farms in the south and west. But this thinking may out of date. N.C. State University economist Mike Walden responds.
“I grew up in the Midwest and Ohio, and I think that when I was growing up in the ‘50s and ‘60s, that was the perspective. And it was actually a true perspective. The south was mainly an area of farms, so too the west until you got to California. The big industrial areas of the country were in the midwest and north.
That really has all changed dramatically. In fact, the latest numbers that we have from the federal government — and this may shock a lot of our listeners — show that in terms of measuring the concentration of manufacturing by the percentage that manufacturing makes up of the regional economy, the southeast is now the largest manufacturing sector in the country.
Twenty percent — over 20 percent of total economic activity in the southeast — is from manufacturing. That’s the highest for any region. And I think people will anecdotally know of stories of factories moving out of the midwest, factories moving out of the north to the south.
We’ve seen a lot of that, for example, in the auto industry. I think the big reasons for this have to do with — number one — with the changing nature of the manufacturing segment of our economy. For example, technology is now much more important than, for example, making steel. Also, the south has advantages in terms of costs, weather, cheaper land. So yes, now when you think of factories, when you think of manufacturing, you really should think of the south and specifically the southeast.”