In this article, we will be looking at the 20 states with the most factories in the US. If you want to skip our detailed analysis, you can go directly to 5 States With The Most Factories In The US.
The Manufacturing Sector: Trends, Opportunities, Future Outlook
The pandemic had a profound impact on the manufacturing sector and it suffered a significant decline during that time. However, government legislation such as the Inflation Reduction Act (IRA) and the CHIPS and Science Act have been central in nurturing the growth and recovery of the manufacturing industry.
On April 16, the Financial Times reported that the IRA aims to incentivize clean technology in the US using $369 billion of tax credits. Similarly, the CHIPS and Science Act was announced to promote semiconductor manufacturing by adding $39 billion in funds and $24 billion worth of manufacturing tax credits. These two acts have added $200 billion in clean technology and semiconductors investments.
Technological advancements currently offer the biggest opportunity for the manufacturing industry. According to Deloitte’s 2024 manufacturing industry outlook, in the next five years, 86% of manufacturing executives surveyed believe that smart factory solutions will be the distinguishing factor in competition. The industrial metaverse has been estimated to add 12% to labour productivity. Similarly, generative AI tools pose an unmatched opportunity to aid manufacturers in everything from product design to supply chain management.
The manufacturing industry experienced robust growth at the start of 2023, fueled prominently by government initiatives. However, it is slowing down as we move closer to the end. On December 5, Reuters reported that manufacturing outputs remained underwhelming in November as factories faced issues of declining employment and rising inflation. Increased inflation and interest rates are impacting consumer spending and demand. The Purchasing Managers’ Index (PMI) was constant at 46.7 in November. A PMI score under 50 implies a contracting manufacturing and services sector. Many economists do not expect a recession in the coming year and the situation is expected to improve.
Leading Companies in the US Manufacturing Sector
Boeing Co (NYSE:BA) is one of the biggest names in the manufacturing industry. Boeing Co (NYSE:BA) develops and manufactures commercial airplanes, defense products, and space systems. On November 28, Boeing Co (NYSE:BA) announced it secured a Lot 10 contract from the US Air Force for manufacturing fifteen KC-46A Pegasus tankers. The contract is valued at $2.3 billion. The company has previously delivered seventy-six KC-46As to the US Air Force. The supplier network for KC-46A includes 37,000 workers employed in more than 40 US states. You can also check out: 20 Largest Manufacturing Companies in the World.
Honeywell International Inc (NASDAQ:HON) is a giant in the manufacturing industry. Honeywell International Inc (NASDAQ:HON) is renowned for manufacturing specialty chemicals, process technologies, electronic and advanced materials, and safety and security technologies. On November 28, Honeywell International Inc (NASDAQ:HON) announced the launch of SwiftDecoder. The SwiftDecoder converts camera-enabled devices into barcode scanners, easing the checkout experience at retail stores. The company is a prominent name in the barcode scanning industry. The SwiftDecoder by the company is an addition to previously offered products, including Code 39 and Aztec 2D. Code 39 is one of the most widely used barcodes in retail and manufacturing, and Aztec 2D is used for checking in passengers on airlines.
Caterpillar Inc. (NYSE:CAT) is one of the biggest manufacturing companies in the US. The company is the world’s leading manufacturer of construction and mining equipment. On October 31, Caterpillar Inc. (NYSE:CAT) reported earnings for the fiscal third quarter of 2023. The company reported an EPS of $5.52, beating estimates by $0.73. The company’s revenue for the quarter grew by 12.11% and amounted to $16.81 billion, ahead of market consensus by $249.03 million. As of December 4, the stock has surged 15.41% over the past six months. Here are some comments from the earnings call of Caterpillar Inc. (NYSE:CAT):
“Sales and revenues increased 12% in the third quarter versus last year. Adjusted operating profit margin improved to 20.8%, up significantly year-over-year. We also generated $2.9 billion of ME&T free cash flow in the quarter. Sales were generally in line with our expectations, while both adjusted operating profit margin and ME&T free cash flow in the third quarter were better than we expected. In addition, we ended the quarter with a healthy backlog of $28.1 billion. Backlog is a function of demand and lead times. As I’ve mentioned, demand remains healthy in most of our end markets. Due to improving supply chain conditions, product availability and lead times have improved for many products. Dealers and customers can wait longer to place orders, which has led to a moderation in order rates, as expected.”
The manufacturing industry is vital for a flourishing economy. The manufacturing industry in the US is also central to the country’s development. We have made a list of the states with the most factories in the US to better understand the manufacturing and economic landscape of the country. You can also check out: Top 20 Manufacturing Countries in the World.
20 States With The Most Factories In The US
Our Methodology
We were unable to find credible data for the exact number of factories in each state of the US. We then relied on the total manufacturing output as our primary metric for gauging which states in the US have the most factories. The rationale was that higher output corresponds to a higher number of factories in the area, as more production indicates the presence of more manufacturing facilities. We have also used the number of employees employed in the manufacturing sector as our secondary metric, building on the hypothesis that if a larger population is engaged in manufacturing jobs, the state could have more factories. The data has been sourced from the National Association of Manufacturers (NAM). We have used the latest available data, which is for 2021, and have arranged our list in ascending order of the total manufacturing output.
20 States With The Most Factories In The US
20. Kentucky
Total Manufacturing Output in 2021: $41.19 billion
Manufacturing Employment in December 2021: 250,000
Kentucky is one of the states with the most factories in the US. The state produced a total output of $41.19 billion and generated 250,000 jobs in 2021.
19. Missouri
Total Manufacturing Output in 2021: $41.75 billion
Manufacturing Employment in December 2021: 274,000
Missouri is located in the mid-western region of the US. Jefferson City is the capital of the state. In 2021, Missouri’s manufacturing sector recorded a total output of $41.75 billion, concurrently offering employment to 274,000 individuals.
18. Virginia
Total Manufacturing Output in 2021: $49.5 billion
Manufacturing Employment in December 2021: 239,000
Virginia is renowned for its robust labor pool and focus on innovation. The state reported a total output of $49.5 billion and generated 239,000 jobs in 2021.
17. Minnesota
Total Manufacturing Output in 2021: $53.13 billion
Manufacturing Employment in December 2021: 320,000
Minnesota is located in the midwestern region of the US. The state has one of the highest numbers of factories in the US. In 2021, the state recorded a total output of $53.13 billion and created jobs for 320,000 individuals.
16. Massachusetts
Total Manufacturing Output in 2021: $56.14 billion
Manufacturing Employment in December 2021: 240,000
Massachusetts has a rich history. Boston is the capital of the state. In 2021 Massachusetts’s manufacturing sector achieved a total output of $56.14 billion, facilitating employment for 240,000 individuals.
15. New Jersey
Total Manufacturing Output in 2021: $60.5 billion
Manufacturing Employment in December 2021: 252,000
New Jersey is home to many manufacturing industries, including chemicals, food, and fragrances. In 2021, the state’s manufacturing sector notched up a total output of $60.5 billion and employed 252,000 individuals.
14. Tennessee
Total Manufacturing Output in 2021: $62.13 billion
Manufacturing Employment in December 2021: 353,000
Tennessee is one of the states with the most factories in the US. In 2021, Tennessee’s manufacturing sector reported a total output of $62.13 billion, employing 353,000 individuals.
13. Washington
Total Manufacturing Output in 2021: $63.29 billion
Manufacturing Employment in December 2021: 268,000
Washinton State has a diverse manufacturing sector. In 2021, Washinton’s manufacturing sector recorded a total output of $63.29 billion, concurrently offering employment to 258,000 individuals.
12. Florida
Total Manufacturing Output in 2021: $64.48 billion
Manufacturing Employment in December 2021: 388,000
Florida has a flouring manufacturing sector. Florida’s manufacturing sector, in 2021, had a total output of $64.28 billion and generated jobs for 388,000 individuals.
11. Georgia
Total Manufacturing Output in 2021: $64.94 billion
Manufacturing Employment in December 2021: 402,000
Georgia is one of the states with the most factories in the US. The state produced a total output of $64.94 billion and generated 402,000 jobs in 2021.
10. Wisconsin
Total Manufacturing Output in 2021: $66.32 billion
Manufacturing Employment in December 2021: 486,000
The manufacturing sector of Wisconsin plays a vital role in the economy. In 2021 Wisconsin’s manufacturing sector achieved a total output of $66.32 billion, enabling employment for 486,000 individuals.
9. New York
Total Manufacturing Output in 2021: $75.24 billion
Manufacturing Employment in December 2021: 419,000
New York has a large workforce and a strong manufacturing industry. In 2021, New York’s manufacturing sector achieved a total output of $75.24 billion, employing 419,000 individuals.
8. Michigan
Total Manufacturing Output in 2021: $101.34 billion
Manufacturing Employment in December 2021: 587,000
Michigan has a rich history and a strong manufacturing sector. In 2021, Michigan’s manufacturing sector recorded a total output of $101.34 billion, concurrently offering employment to 587,000 individuals.
7. Pennsylvania
Total Manufacturing Output in 2021: $101.95 billion
Manufacturing Employment in December 2021: 553,000
Pennsylvania is one of the states with the most factories in the US. The state’s manufacturing sector had a total output of $101.95 billion and contributed to the employment of 553,000 individuals in 2021.
6. North Carolina
Total Manufacturing Output in 2021: $102.34 billion
Manufacturing Employment in December 2021: 474,000
North Carolina has a thriving manufacturing sector that contributes significantly to the company’s economy. The state produced a total output of $102.34 billion and generated 474,000 jobs in 2021.
Click to continue reading and see the 5 States With The Most Factories In The US.
Suggested articles:
- 25 Most Expensive Countries in the World to Raise a Child
- 20 Tax-Friendly States for High Income in the US
- 30 Countries With Best Drivers and Stringent Traffic Laws
Disclosure: None. 20 States With The Most Factories In The US is originally published on Insider Monkey.