Uptown Greenville, NC


State Ranks High in Cost-Efficient Manufacturing

By K.J. Williams
The Daily Reflector

July 11, 2011 - North Carolina ranks in the top 10 nationally for states with the most cost-efficient manufacturing, according to an analysis by the independent nonprofit American Institute for Economic Research.

It was the only Southern state to make the grade.

AIER research fellow Lei Chen, who holds a doctorate degree in economics from the University of Connecticut, conducted research that found that among the top 10, eight of the states were located in the West and Northeast.

“States that are the most cost-efficient have manufacturing bases that allocate their resources in such a way that relatively low-cost inputs replace high-cost ones, and inputs are used in the most productive manner,” he said in a news release this week.

Chen used 2007 economic census data to reach his conclusions. Three states tied for the most cost-effective top slot: Oregon, Connecticut and Iowa. North Carolina came next. States that followed North Carolina in the top 10 were: New York, Arizona, Massachusetts, and Nevada. Colorado and Washington also tied for a slot in the top ten.

The list of states with the least cost-efficient manufacturing was headed by Mississippi, followed by North Dakota, Kentucky, Vermont, Alabama, Louisiana, Alaska, Montana, South Carolina and Idaho.

An earlier study in which Chen was involved did a state-by-state comparison of the cost of producing a dollar's worth of goods in different states. North Carolina was second on the list behind Oregon, the news release states.

Kelly Andrews, associate director of the Pitt County Development Commission, said that factors that contribute to North Carolina's standing include lower labor costs and well-trained workers.

“A lot of the training is free and a lot of it is low-cost and that contributes to the efficiencies of these companies because they don't have to invest a lot of money in training,” Andrews said.

North Carolina is ranked fifth nationally for manufacturing, she added.

It is also first in the Southeast in manufacturing output, according to the website of the North Carolina Chamber, a state affiliate of the National Association of Manufacturers.

Despite the state's high standing, the recession did have an effect on local manufacturing.

“There are companies struggling,” Andrews said of Pitt County.

“We have projects that are still on hold. When the recession hit, we had people pull back ... . Some old ones are resurfacing, but not as quickly as we like, but there are new projects as well,” Andrews said.

Manufacturing companies from elsewhere continue to consider Pitt County as a potential site, and the development commission works to try and bring them here, she said.

“It runs the gamut from advanced manufacturing to biofuel. Manufacturing is still a strong part of our diversified economy in Pitt County.”

Meanwhile, some Pitt County industries have been experiencing a turnaround, and they've been hiring in small numbers, Andrews said.

The American Institute for Economic Research is located in Massachusetts, and was founded to promote independent research in 1933. For information, visit the website at www.aier.org.

Contact K.J. Williams at kwilliams@reflector.com or (252) 329-9588