Is Manufacturing Back?

By: Kriss Sjoblom
12:00 am
February 8, 2011

John Talton had a column titled “Manufacturing Is Back, But It Isn’t Pretty” in the Sunday Seattle Times. He sure got the “it isn’t pretty” part right.

Here are three charts to give some perspective on how manufacturing has fared in and after the Great Recession:

The first chart compares for the U.S. the percentage losses since February 2008 in total nonfarm jobs and manufacturing jobs. (February 2008 was the peak month for nonfarm employment.)

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From February 2008 to February 2010, the U.S. lost 6.3 percent of its nonfarm jobs. By January 2011, the most recent month for which U.S. employment numbers are available, the loss had been trimmed by 80 basis points to 5.5 percent. Manufacturing lost 16.3 percent of its jobs from February 2008 to December 2009. That loss has since been trimmed by 110 basis points to 15.2 percent. While the percentage rebound is a bit greater for manufacturing jobs than for total jobs, the percentage drop for manufacturing was more than twice that for total nonfarm employment.

The second chart compares Washington’s total nonfarm and manufacturing percentage job losses.

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For total nonfarm employment, Washington’s percentage loss from February 2008 to February 2010, 7.0 percent, was a bit worse than the nation as a whole, and the subsequent rebound has been a bit weaker.  In December 2009 (the most recent month for which Washington employment is available) Washington nonfarm employment was 6.3 percent below the peak.

For manufacturing, Washington’s percentage job losses were not as great as those for the nation as a whole. The state’s manufacturing sector lost 13.7 percent of its jobs from February 2008 to the trough in February 2010. By December 2010, Washington’s manufacturing job loss had been trimmed by 80 basis points to 12.9 percent.

The better performance of manufacturing in Washington can be attributed to aerospace. Washington’s aerospace employment in December 2009 was only 3.5 percent lower than it had been in February 2008. For all other manufacturing, employment was 16.7 percent lower in December 2009 than it had been in February 2008.

The final chart shows manufacturing as a share of total U.S. nonfarm employment from January 1947 to January 2011.

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Manufacturing’s share of employment fell from 33 percent to 9 percent over the period. A cyclical pattern overlays the secular declining trend: manufacturing’s share tends to decline sharply during recessions and then bounce back somewhat in the ensuing recovery. Manufacturing’s share fell from 9.9 percent in February 2008 to 8.9 percent in October 2009 and has held fairly constant since that point.

It is striking that there were no bounce-backs in manufacturing’s share following the 1990 and 2001 recessions. This helps to explain why both of these recoveries were called “jobless.”

Categories: Categories , Economy.