California leads the nation in terms of manufacturing jobs and gross domestic product, according to a study released this month by California Manufacturing Technology Consulting.
Commissioned by the Torrance trade industry group, the study was conducted by Beacon Economics, an independent research and consulting firm located on Fairfax Avenue near the Farmers Market in Los Angeles.
While the study points to high housing and other costs as a serious problem in attracting and retaining workers, it also shines a light on remarkable productivity gains that the state’s manufacturing sector has achieved.
The state’s manufacturing output has exceeded the national rate by 83% since the late 1990s.
California’s share of manufacturing jobs in the United States has ticked up slightly since 2000, currently standing at 11%. That is the highest percentage of manufacturing jobs in the country.The report also found that 25% of state manufacturing jobs are in four subsectors – electronic instruments, semiconductors and electrical components, computer and peripheral equipment and aerospace manufacturing.
“In relative terms, manufacturing companies do not employ as many workers as they once did, but the US manufacturing base is technologically intensive and consequently yields higher average annual wages,” the report said.
California is also the largest state contributor to national manufacturing GDP, representing 14.5%, followed by Texas at 10.9%. Further behind are Ohio, Illinois, Indiana, North Carolina, Pennsylvania and Michigan.
Of California’s 21 manufacturing subsectors, 11 gained jobs and 10 lost jobs between 2010 and 2020. There are currently 53,000 job openings in California’s manufacturing sector. If the state is unable to address its housing affordability crisis, parts of the industry will continue to leave, the release stated. California is competitive in high-technology industries such as semiconductors, computers, peripherals electronic components, communications equipment, and sophisticated radar and satellite instrumentation.
Taner Osman, research manager at Beacon Economics, said the number of traditional manufacturing jobs have decreased.
“But the headlines we read miss the striking advances that have occurred in output as a result of innovations, improvements, and investments in production processes – particularly in high tech,” Osman said in a statement.