Amid poor economic climate, survey ranks Mo. top state for manufacturing

Despite recent cutbacks in numerous plants, Missouri has been ranked the No. 1 state for manufacturing in the country.

Compiled by Ball State University, the 2008 National Manufacturing and Logistics Report Card ranked all 50 states in 20 categories, including property taxes, sales taxes, crime and percentage of the population with college degrees. The report card placed Missouri at the top for low long-term health-care costs, health-care premiums and property taxes.

"Missouri's ranking came as a bit of a surprise to me," said Hicks, an associate professor of economics who also is director of the university's Bureau of Business Research. "Other business rankings did not have Missouri near the top, and the state does not currently enjoy a high proportion of its economy in manufacturing. But, after carefully selecting variables that accounted for the factors associated with manufacturing job growth, Missouri came out on top."

Missouri was one of six states to earn an A in the study conducted by the Muncie, Ind.-based university.

Neighboring states that ranked near the top included Kansas and Tennessee with B's while Arkansas and Illinois both received C's. West Virginia ranked last in the survey, one of seven states graded an F.

The report found that as the national economy slowed in the final quarter of 2007, industrial production increased by 2.8 percent.

Additionally, the report found that manufacturing employment in the U.S. peaked in the late 1970s with more than 19.5 million manufacturing workers. As of 2008, that number has declined to about 13.8 million.

Missouri's high ranking comes despite several setbacks in the state's manufacturing sector.

On June 30, Chrysler announced it was closing its Fenton, Mo., plant, resulting in the loss of 2,400 jobs. Two weeks later, Canadian aircraft giant Bombardier announced it would not build a $375 million plant in Kansas City, Mo., which would have provided up to 2,100 jobs.

In Southeast Missouri, Dana Corp.'s Cape Girardeau plant, which made gears and other parts for automobiles, closed in November 2007, resulting in the loss of 200 jobs. The move was due to the company declaring bankruptcy and outsourcing the work to Mexico.

On Aug. 1, Havco Wood Products announced it was reducing the work force at its Cape Girardeau plant by 60 full-time and 11 temporary employees. And on Friday, a decrease in sales prompted management at Thorngate to reduce the work week of 325 employees in Cape Girardeau.

Area fares better

While the region has experienced a decrease in employment, Southeast Missouri has received some economic good news.

Orgill announced July 16 the construction of a new distribution center in Sikeston, Mo., that could employ up to 350 people by 2013. Two days later, National Asset Recovery Services said it would be adding 100 additional call center agent jobs at its Cape Girardeau location. Newell Rubbermaid recently began accepting applications for 40 additional jobs at its Jackson plant.

Local experts contend that the manufacturing industry has fared better in the area than in other parts of the state.

Southeast Missouri State University economics professor Bruce Domazlicky said that since manufacturing has been in a decline nationwide, it is not surprising that Southeast Missouri has lost jobs as well.

"Overall, however, the data shows that Southeast Missouri has held its own in manufacturing compared to the rest of the country and that it remains an important sector in this region," Domazlicky said. "Transportation and logistics is another sector that is very important in this region. Given its somewhat central location and good transportation access, Southeast Missouri has a competitive advantage in that sector that will only improve with time."

Mitch Robinson, executive director of Cape Girardeau Area Magnet, said rare large projects like Bombardier that produce high-tech products such as airplanes are what every state wants for its residents. He said the same is true at the local level.

Robinson said the job gains and losses in Southeast Missouri and nationwide will continue, no matter how well or poorly the economy is performing at the time.

"You hope that the increases are greater than the losses," Robinson said. "With good leadership at the state and local levels, low-cost manufacturing environments and productive work force, Missouri will always be an excellent location for manufacturing. But if one of these factors — and there are many more — gets out of line, then you will see the economy suffer."

bblackwell@semissourian.com

335-6611, extension 137