Industrial Productivity in Florida

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Industrial Productivity in Florida

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Industrial Productivity in Florida
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University of South Florida -- Center for Economic Development Research
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Tampa, Fla
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Center for Economic Development Research
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English

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Industrial productivity ( lcsh )

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University Of South Florida
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University Of South Florida
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C63-00117 ( USFLDC DOI )
c63.117 ( USFLDC Handle )

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Industrial Productivity in Florida An Analysis Performed by Eric Moochnek, Graduate Research Assistant CENTER FOR ECONOMIC DEVELOPMENT RESEARCH College of Business Administration UNIVERSITY OF SOUTH FLORIDA USF Downtown Center 1101 Channelside Dr. 2nd Floor N Tampa, Florida 33602 Office: (813) 905-5854 or Fax: (813) 905-5856 March 2007

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The purpose of this article is to update the Florida Technology Development Index, which the Center for Economic Development Research (CEDR) originally released in September 2003 Here we update the portion of the Index titled "Industrial Productivity." This update extends the original data, which covered 1997 through 2000, out to 2005. We retain Arizona, North Carolina, and Texas as the benchmark states. Industrial productivity is the creation of goods of value. Increasing productivity raises competitiveness in the marketplace and the standard of living for participants in an economy. If workers increase production in an allotted time, firms may sell more and increase revenue. And, workers can share in the increased revenue with higher pay and better benefits without a need for price increases in the goods that are produced. Economists measure output the amount produced as the sum of the cost of inputs used during production and the value-added to those inputs during production. The manufacturing sector of an economy typically has a relatively high value-added during the production process when compared with other sectors. According to the North American Industry Classification System (NAICS) manual, "The Manufacturing sector comprises establishments engaged in the mechanical, physical, or chemical transformation of materials, substances, or components into new products." However, activity normally classified as Construction is excluded and the NAICS manual continues, "Establishments in the Manufacturing sector are often described as plants, factories, or mills ... We obtained the data for employment and value-added in manufacturing from the U.S. Census Bureau's Annual Survey of Manufacturers ( ASM). 1 The ASM provides sample estimates of metrics for all manufacturing establishments with one or more paid employee. Table 1 reports three metrics for the manufacturing sector in Florida and the benchmark states: 1) the number of Manufacturing Employees, 2) Value-added in Manufacturing, and 3) Value-added per Manufacturing Employee. For each metric we calculate the percent change from the previous year and a cumulative percent change since 1997. The table includes our original data for 1997 to 2000 and the update for 2001 to 2005. The new, updated data is in blue. 1 http: // www.census.gov / mcd/asm-as3.html accessed on January 17, 2007 1

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Florida % Change from Manufacturing Previous Employees Year Year 1997 427 556 1998 426 833 -0 17% 1999 423 960 -0 67% 2000 426,135 0 51% 2001 401,281 -5 83% 2002 377, 137 -6 02% 2003 358 908 -4 83% 2004 354 196 -1. 31% 2005 347 478 -1. 90% North Carolina % Change from Manufacturing Previous Employees Year Year 1 997 772,474 1998 769,986 -0 32% 1999 757,954 -1. 56% 2000 744,042 -1. 84% 2001 693 667 -6 77% 2002 623,333 -10.14% 2003 569,379 -8 66% 2004 552,413 -2. 98% 2005 539,620 -2.32% Table 1 Manufacturing Sector Panel A Manufacturing Employees Arizona % % Change Change from Since Manufacturing Previous 1997 Employees Year Year 1997 193 303 -0 17% 1998 197,671 2 26% -0 84% 1999 194 153 -1.78% -0 33% 2000 200 754 3.40% -6. 15% 2001 186 376 -7. 16% -11. 79% 2002 168,155 -9 78% -16.06% 2003 161,235 -4.12% -17.16% 2004 158 004 -2.00% -18 73% 2005 158 995 0 63% Texas % % Change Change from S i nce Manufacturing Previous 1997 Employees Year Year 1997 958,232 0 32% 1998 980 ,991 2 38% -1. 88% 1999 957 560 -2. 39% -3 68% 2000 979 029 2 24% -10.20% 2001 950,423 -2. 92% -19 31% 2002 855,658 -9.97% -26 29% 2003 806 797 -5. 71% -28.49% 2004 773 506 -4. 13% -30 14% 2005 779,242 0 74% 2 % C h ange Since 1 997 2 26% 0.44% 3 85 % -3. 58% -13 01% -16 59% -18 26% -17 75% % Change S i nce 1997 2 38% -0 07% 2 17% -0. 81% -10 70% -15 80% -19 28% -18.68%

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Table 1 continued Manufacturing Sector PanelB Value-added i n Manufacturing Florida Arizona % % Change % Change % from Change from Change Va l ue-added Previous Since Value-added Previous Since (OOO's) Year 1997 (OOO's) Year 1997 Year Year 1997 $39 767,726 1997 $27 900 974 1998 $41, 094 ,391 3 34 % 3 34% 1998 $28,515 570 2 20 % 2 20 % 1 999 $41, 807,418 1 74% 5 13% 1999 $32,753, 195 14.86 % 17 .39% 2000 $41, 919 167 0 27% 5.41% 2000 $29 258,741 10 67 % 4 .87% 2001 $39 974 ,441 -4 64 % 0 .52% 2001 $ 28 429 845 -2. 83 % 1.90 % 2002 $41, 912 600 4 .85% 5 .39% 2002 $25, 976 992 -8. 63 % -6 .90% 2003 $42,391,298 1 14% 6 60 % 2003 $29 016 543 11. 70 % 4 00 % 2004 $44 925 568 5 .98% 12.97% 2004 $24 095 927 -16 96 % -13 64 % 2005 $47 289 946 5 26 % 18.92% 2005 $23 736 129 -1.49 % -14 .93% North Carolina Texas % % Change % Change % from Change from Change Value-added Previous Since Value-added Previous S i nce (OOO' s) Year 1997 (OOO's) Year 1997 Year Year 1997 $79,790 807 1997 $127 579 894 1 998 $83 917,094 5 17% 5 17 % 1998 $127 675 922 0 08 % 0 08 % 1999 $89,418 512 6 56% 12.07% 1999 $129 787 123 1 65 % 1 73 % 2000 $92,462 964 3.40% 15.88% 2000 $134 088 018 3 .31% 5 .10% 2001 $91, 183 819 -1.38% 14 28 % 2001 $120 085 506 -10.44 % -5.87% 2002 $87 355 207 -4 20 % 9.48 % 2002 $124,462 554 3 64 % -2.44% 2003 $99 016 793 13 35% 24 .10% 2003 $123 845 909 -0.50% 2 .93% 2004 $90,717,787 -8. 38% 13. 69 % 2004 $150 697 653 21.68% 18.12% 2005 $101 268,432 11. 63 % 26 .92% 2005 $172 960 157 14 .77% 35. 57% 3

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Year 1997 1998 1999 2000 2001 2002 2003 2004 2005 Year 1997 1998 1999 2000 2001 2002 2003 2004 2005 Table 1 continued Manufacturing Sector PanelC Value-added per Manufacturing Employee Florida Arizona % Change % Value-added per from Change Value-added per Manufacturing Previous Since Manufacturing Employee Year 1997 Employee Year $93 012 1997 $144,338 $96 277 3 51% 3 51% 1998 $144 258 $98,612 2.43% 6 02% 1999 $168,698 $98,371 -0 24% 5 76% 2000 $145 744 $99 617 1 27 % 7 .10% 2001 $152 540 $114 134 14 .57% 22 .71% 2 002 $154 482 $118 ,112 3.49 % 26.99% 200 3 $17 9 964 $126 838 7.39 % 36.37% 2 004 $152 502 $ 136, 095 7.30 % 46 .32% 2005 $ 1 49 289 North Carolina Texas % Change % Value-added per from Change Value-added per Manufacturing Previous Since Manufacturing Employee Year 1997 Employee Year $103,293 1997 $133 141 $108,985 5 51% 5 51% 1998 $130 150 $117,974 8.25% 14 21% 1999 $135 593 $124 ,271 5 34% 20 31% 2000 $136,960 $131,452 5.78 % 27. 26 % 2001 $126,350 $140,142 6.61 % 35.67% 2002 $145 458 $156,340 11.56% 51.36% 2003 $153 503 $164,220 5.04% 58.98% 2004 $194 824 $187,666 14.28 % 81. 68 % 2005 $221,959 % Change % from Change Previous Since Year 1997 -0 06% 0 06% 16.94% 16 .88% -13 61% 0 97% 4 66 % 5 68 % 1 27 % 7 03 % 16 .50% 24 .68% 15.26 % 5 66 % -2. 1 1 % 3.43 % % Change % from Change Previous Since Year 1997 -2. 25% -2. 25% 4 18% 1 84% 1 01% 2 87% -7. 75 % -5. 10 % 15.12% 9 25 % 5.53 % 15. 29 % 26 .92% 46 .33% 13.93% 66 .71% Sour c e : Compiled by CEDR from U S Census Bureau, Annual Survey of Manufacturers, Geographic Area Statistics, htti;)://www. census gov/mcd/asm-as3 html# 4

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Panel A, Table 1, enumerates Manufacturing Employees with year-over-year and cumulative percent changes. At the start of our analysis in 1997, Florida had nearly 428 thousand employees working in the manufacturing sector. Among the benchmark states both North Carolina and Texas had more manufacturing employees than Florida. Arizona had fewer manufacturing employees than Florida. In 2005, Florida's manufacturing employees declined to about 347,500 workers, but its relative position to the benchmark states for the number of manufacturing employees was unchanged from 1997. Florida, as well as the benchmark states, experienced a sizeable decline in manufacturing employees between 1997 and 2005. For Florida, Arizona, and Texas the cumulative decline was around 18%, while North Carolina had a 30.14% drop in manufacturing employees. In Florida the largest year-over-year percent decreases in manufacturing employees came in 2001, 2002, and 2003. The decrease has continued, but moderated in 2004 and 2005. The benchmark states experienced roughly the same trend in the decrease of manufacturing employees. Panel B, Table 1, reports Value-added in Manufacturing with year-over-year and cumulative percent changes. Although the number of manufacturing employees in Florida declined between 1997 and 2005, value-added measured in nominal dollars actually increased. (We discuss value-added measured in constant dollars later in this article). In 1997 value-added in manufacturing was about $39.7 billion, and increasing to about $47.3 billion by 2005. The cumulative percent increase in Florida's value-added in manufacturing from 1997 to 2005 was 18.92%. North Carolina and Texas also experienced nominal growth of value-added in manufacturing during this period. However, the total dollar value and percent increases for North Carolina and Texas exceeded that of Florida. The cumulative percent increases were respectively 26.92% and 35.57%, producing by 2005 about $101.3 billion in value-added for North Carolina and $173.0 billion for Texas. Arizona had a cumulative decrease of 14.93%, experiencing $23.7 billion in value-added by 2005, down from $27.9 billion in 1997. Panel C, Table 1, reports Value-added per Manufacturing Employee with year over-year and cumulative percent changes. Over the period 1997 to 2005, in Florida and the benchmark states nominal value-added per manufacturing employee has risen. This is indicative, of course, of declining employment in manufacturing while value-added in manufacturing is increasing (except Arizona). Because Arizona's value-added in manufacturing did not increase over this period, its cumulative percent change in value added per manufacturing employee was a relatively low 3.43%. By comparison, Florida's value-added per manufacturing employee rose 46.32% from $93,012 in 1997 to $ 136,095 in 2005. North Carolina and Texas experienced even grater percent gains than Florida. For North Carolina, value-added per manufacturing employee in 1997 was $103,293, then increasing to $187 ,666 by 2005 or an 81.68% cumulative percent gain. For Texas, value added per manufacturing employee in 1997 was $133,141, then increasing to $221,959 by 2005 or a 66.71 % cumulative percent gain. In 1997, Florida's value-added per manufacturing employee was lower than any of the three benchmark states And, despite of Florida's 46.32% surge, by 2005 it was still at a lower dollar amount than the benchmarks. 5

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Year 1997 1998 1999 2000 2001 2002 2003 2004 2005 Year 1997 1998 1999 2000 2001 2002 2003 2004 2005 When we examine Value added in Manufacturing in constant 1997 dollars a picture different from nominal Value-added, as shown in Panel B of Table 1 emerges. Table 2 reports value-added in the manufacturing sector considering inflation between 1997 and 2005. Our inflation adjustments are based on the Producer Price Index (PPI) for Industrials. After adjusting for inflation Florida s value-added in manufacturing actually declines by a cumulative 9.30%. In 1997 Florida s value-added in manufacturing was about $39. 7 billion and by 2005 drops to $36.1 billion when measured in 1997 dollars. Among the benchmark st a tes only Texas achieved a real increase in v alue-added in manufacturing between 1997 and 2005. Texas had a 3.41 % increase from $127.6 billion in 1997 to $131. 9 billion (in 1997 dollars) in 2005. North Carolina had a smaller inflation adjusted decrease in value-added than Florida (-3 19% versus -9.30%). And, Arizona experienced a larger inflation-adjusted decrease than Florida (-35.11 % v ersus -9.30%). Table 2 Manufacturing Sector with Inflation Adjustments Value-added in Manufacturing Florida Arizona % % Change % Change Nominal Value-added from Change Nominal Value added from % Change Value-added in 1997$ Previous Since Value-added in 1997$ Previous Since (OOOs) (OOOs) Year 1997 (OOOs) (OOOs) Year 1997 Year $39 767 726 $39,767 726 1997 $27 900,974 $27,900 974 $41,094 ,391 $42,327 556 6.44% 6.44% 1998 $28 515,570 $29 ,371, 268 5 27% 5 27 % $41, 807,418 $41, 032 010 -3 06% 3 18 % 1999 $32 753, 195 $32,145 717 9 45% 15 .21% $41, 919,167 $ 38,438 514 -6 32% -3 34 % 2000 $29 ,258 7 41 $26 829 315 16 54 % -3 84 % $39 97 4,441 $39 324, 198 2 30% -1. 12 % 2001 $28,429 845 $27,967 392 4 24% 0 24 % $41, 912 600 $39 604 912 0 71% -0.41% 2002 $25,976,992 $24 546 ,711 -12 23% -12 02 % $42 ,391, 298 $38 592,795 -2 56% 2.95 % 2003 $29,016,543 $26,416,494 7 62% -5 32 % $44 925 568 $37,536,494 -2 74% -5 61% 2004 $24,095 927 $20 132 ,781 -23 79 % -27.84 % $47,289 946 $36,071 010 -3.90% -9.30% 2005 $23,736 129 $18 105 035 -10.07% 35 .11% North Carolina Te x as % % Change % Change Nominal Value-added from Change Nominal Value-added from % Change Value-added in 1997$ Previous Since Value-added in 1997$ Previous Since (OOOs) (OOOs) Year 1997 (OOOs) (OOOs) Year 1997 Year $79,790,807 $79 790,807 1997 $127,579 894 $127,579 894 $83 917 094 $86,435 287 8 33% 8 33% 1998 $127 675,922 $131,507 235 3 08% 3 08 % $89 418,512 $87 760,054 1.53% 9 99% 1999 $129 787 123 $127,379 943 -3 14% -0.16 % $92,462,964 $84,785,534 -3 39% 6 26% 2000 $134,088,018 $122 954,356 -3.47% -3 63 % $91, 183,819 $89 700,581 5 80% 12.42% 2001 $120 085 506 $118, 132, 140 -3 92% 7.41% $87 355,207 $82 545 ,471 -7.98% 3.45% 2002 $124 ,462,554 $117 609 705 -0.44% -7.81% $99,016 793 $90,144,321 9 21% 12 98% 2003 $123,845 909 $112 748 605 -4. 13% -11. 63 % $90 717,787 $75 797 098 -15 92% -5 .01% 2004 $150,697 653 $125 ,911, 855 11.67% 1 .31% $101,268,432 $77 243,789 1 91% -3.19% 2005 $172 960 157 $131,927,567 4 78% 3 41% Source : Compiled by CEDR from US Census Bureau, Annual Survey of Manufacturers, Geographic Area Statistics at http : //www census gov/mcd/asm-as3 html# http://data.bls gov/cgi bin/surveymost Reviewed February 2007 6

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In Table 3 we examine Value-added per Manufacturing Employee in constant 1997 dollars, rather than in nominal dollars as shown in Panel C of Table 1. Our inflation adjustments, as stated before, are based on the Producer Price Index (PPI) for Industrials. After adjusting for inflation, Florida's value-added per manufacturing employee increased by a cumulative 11.61%. In 1997, Florida's value-added per manufacturing employee was $93,012, and by 2005 it increased to $103 808 (in 1997 dollars). Two of the benchmark states, Texas and North Carolina, achieved gains larger than Florida, while Arizona saw a decrease in value-added per manufacturing employee. In 1997, Arizona started with a value-added per manufacturing employee of $144,338, which by 2005 decreased by 21.11% to $113,872 (in 1997 dollars). Texas and North Carolina both enjoyed large gains in value-added per manufacturing employee. Texas had a 27.16% increase from $133,141 in 1997 to $169,302 (in 1997 dollars) in 2005. North Carolina had a 38.58% increase from $103,293 in 1997 to $143,143 (in 1997 dollars) in 2005. Table 3 Value-added per Manufacturing Employee with Inflation Adjustments Value-added per Manufacturing Employee Florida Arizona Nominal Value-added % Nominal Value-added % Value-added per Change % Value-added per Change % per Manufacturing from Change per Manufacturing from Change Manufacturing Employee in Previous Since Manufacturing Employee in Previous Since Employee 1997$ Year 1997 Employee 1997$ Year 1997 Year Year 1997 $93,012 $93,012 1997 $144 338 $144 338 1998 $96,277 $99 167 6 62% 6.62% 1998 $144,258 $148 587 2 94% 2 94% 1999 $98,612 $96,783 -2.40% 4.05% 1999 $168,698 $165,569 11.43% 14. 71% 2000 $98,371 $90 203 -6.80% -3 02% 2000 $145,744 $133,643 -19.28% -7.41% 2001 $99,617 $97,997 8 64% 5 36% 2001 $152,540 $150 059 12.28% 3.96% 2002 $114,134 $105 015 7 16% 12 90% 2002 $154,482 $145,977 -2.72% 1 14% 2003 $118,112 $107 528 2 39% 15.61% 2003 $179,964 $163 838 12.24% 13 51% 2004 $126,838 $105,977 -1.44% 13.94% 2004 $152,502 $127,419 -22.23 % -11.72% 2005 $136,095 $103 808 -2.05% 11. 61% 2005 $149,289 $113,872 -10.63% -21. 11% North Carolina Texas Nominal Value-added % Nominal Value-added % Value-added per Change % Value-added per Change % per Manufacturing from Change per Manufacturing from Change Manufacturing Employee in Previous Since Manufacturing Employee in Previous Since Employee 1997$ Year 1997 Employee 1997$ Year 1997 Year Year 1997 $103,293 $103,293 1997 $133 ,141 $133,141 1998 $108,985 $112,256 8.68% 8.68% 1998 $130,150 $134,055 0.69% 0.69% 1999 $117,974 $115,785 3.14% 12.09% 1999 $135,593 $133 026 -0.77% -0 09% 2000 $124,271 $113 953 -1. 58% 10.32% 2000 $136,960 $125,588 -5.59% -5.67% 2001 $131,452 $129 314 13.48% 25.19% 2001 $126,350 $124,294 -1.03% -6.64% 2002 $140,142 $132,426 2.41% 28.20% 2002 $145,458 $137,449 10.58% 3 24% 2003 $156,340 $158,320 19.55% 53.27% 2003 $153,503 $139,748 1.67% 4.96% 2004 $164 220 $137,211 -13 33% 32 84% 2004 $194,824 $162,781 16.48% 22 26% 2005 $187,666 $143, 143 4 32% 38 58% 2005 $221, 959 $169 302 4 01% 27 16% Source : Compiled by CEDR from US Census Bureau, Annual Survey of Manufacturers, Geographic Area Statistics at http://www census gov/mcd/asm-as3 html# http : //data bls.gov/cgi-bin/surveymost Reviewed February 2007 7

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Next we present our Summary Indicators for Industrial Productivity. The summary indicator is the percent of Gross State Product (GSP) that is contributed by Manufacturing Value-added. For the Summary Indicators for Industrial Productivity we obtain Gross State Product from the U S Department of Commerce, Bureau of Economic Analysis and the previously collected Manufacturing Value-added data from the Census Bureau's ASM.2 We base the Summary Indicators in Table 4 on nominal dollar amounts ofvalue added in manufacturing and gross state product. (Because the summary indicators are ratios, adjusting both numerator and denominator by the same inflation factor yields identical results to using nominal values). Florida and the three benchmark states all experienced a drop in the value of their indicators between 1997 and 2005. During this period Florida's Summary Indicator for Industrial Productivity consistently remained below that of the benchmarks. In 1997, Florida's Indicator was 10.21 %, and by 2005 the Indicator's value dropped to 7 .02%. This was a cumulative decrease of 31.21 % percent. Among the benchmark states, Arizona had the largest drop in its Indicator with a cumulative decrease of 51.98%. Arizona's Indicator was 22 82% in 1997 and fell to 10.96% by 2005. In 1997, North Carolina's Indicator was 36.00%, and by 2005 it dropped to 29.21 %, a cumulative decrease of 18.85%. The Indicator for Texas was more stable, declining from 20.96% in 1997 to 17.45% in 2005. This cumulative decrease of 16. 74% was lower than the other benchmark states and Florida. 2 http: / /bea doc.gov./bea/regional/gsp accessed on December 22, 2006. 8

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Table 4 Summary Indicators for Industrial Productivity Non-Inflation Adjusted Florida Arizona Summary Summary Summary Summary Manufacturing Indicator % Indicator% Manufacturing Indicator % Indicator% Value-added Gross State Summary change from change Value-added Gross State Summary change from change (OOO' s) Product (OOO's) Indicator previous year since 1997 (OOO's) Product (OOO's) Indicator previous year since 1997 Year Year 1997 $39,767,726 $389,473,000 10 21% 1997 $27,900,974 $122,273,000 22.82% 1998 $41,094,391 $415,564,000 9.89% -3.15% -3.15% 1998 $28,515,570 $132,897,000 21.46% -5 97% -5.97% 1999 $41,807,418 $442,613 000 9.45% -4.48% -7.49% 1999 $32 753 195 $144,596,000 22.65% 5.57% -0.73% 2000 $41, 919,167 $471,623,000 8 89% -5.90% -12 95% 2000 $29,258,741 $153,469,000 19.06% -15.83% -16.45% 2001 $39,974,441 $497,423,000 8.04% -9 59% -21.29% 2001 $28,429 845 $165,358,000 17 19% -9 82% -24 65% 2002 $41,912,600 $522,719,000 8.02% -0 23% -21.47% 2002 $25,976,992 $171,942,000 15 .11 % -12 13% -33 79% 2003 $42,391 298 556 748,000 7 61% -5.04% -25.43% 2003 $29,016 543 $182,414 000 15 91% 5.29% -30.29% 2004 $44 925,586 $609 372 000 7 37% -3.17% -27 80% 2004 $24,095,927 $194,216,000 12.41 % -22 00% -45 63% 2005 $47,289,946 $673,27 4,000 7 02% -4 73% -31.21 % 2005 $23, 726, 139 $216,528,000 10.96% -11. 68% -51. 98% North Carolina Texas Summary Summary Summary Summary Manufacturing Indicator % Indicator% Manufacturing Indicator % Indicator% Value-added Gross State Summary change from change Value-added Gross State Summary change from change (OOO's) Product (OOO's) Indicator previous year since 1997 (OOO's) Product (OOO's) Indicator previous year since 1997 Year Year 1997 $79,790,807 $221,629 000 36.00% 1997 $127,579,894 $608 622,000 20 96% 1998 $83 917,094 $241,220,000 34.79% -3 37% -3 37% 1998 $127,675,922 $641,405,000 19 91% -5.04% -5 04% 1999 $89,418,512 $260 628 000 34 31% -1. 38% -4 70% 1999 $129,787,123 $678,808,000 19 12% -3 95% -8.79% 2000 $92,462,964 $272,934 000 33 88% -1. 26% -5.90% 2000 $134,088,018 $738,270,000 18.16% -5 01% -13 36% 2001 $91,183,819 $285,651,000 31. 92% -5 77% -11.33% 2001 $120,085,506 $762,247,000 15 75% -13 26% -24 84% 2002 $87,355,207 $296 435,000 29.47% -7 68% -18 15% 2002 $124,462,554 $783,480,000 15 89% 0 84% -24 22% 2003 $99,016,793 $307 871,000 32 16% 9 14% -10 67% 2003 $123,845,909 $828,456,000 14. 95% -5.90% -28.69% 2004 $90,231,000 $323,962 000 27 85% -13.40% -22 64 % 2004 $150,697,653 $903 208,000 16 68% 11.61% -20.41 % 2005 $101,268,432 $346 640,000 29 21% 4 89% -18.85% 2005 $172,690, 157 $989,443,000 17.45% 4.61% -16.74% Source: Compiled by CEDR from US Census Bureau, Annual Survey of Manufacturers, Geographic Area Statistics at http :// www census gov/mcd / asm-as3 html# US Department of Commerce Bureau of Economic Analysis Regional Accounts Data at http://bea.doc.qov ./ bea/req i onal / qsp/ 9

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Since 1997 manufacturing has been on the decline in Florida as well as in the benchmark states. (The decline in manufacturing is an often reported national trend). But, when assessed according to the Summary Indicators, Florida's relative position has consistently trailed the benchmark states. The GSP for Florida and the benchmarks has steadily increased while the Summary Indicators decline. Thus, while all of these states' economies are growing, manufacturing activity plays a smaller and smaller role In this article we have analyzed the Florida economy's manufacturing activity relative to the benchmark states of Arizona, North Carolina, and Texas. During the period of analysis, 1997 to 2005, Florida and the benchmark states experienced a sizeable decline in manufacturing workers. Although the number of manufacturing workers declined, value-added measured in nominal dollars actually increased except in Arizona. Furthermore, in Florida and the benchmark states nominal value-added per manufacturing worker increased. In 2005, Florida's value-added in the manufacturing sector reached$ 136,095 per worker. However, when we measure value-added in manufacturing in constant 1997 dollars a different picture emerges. After adjusting for inflation, Florida's value-added in manufacturing actually declines. Among the benchmark states, only Texas achieved a real increase in value-added in manufacturing. In 1997, Florida's value-added per manufacturing employee was $93,012, and by 2005 it increased to $103,808 (in 1997 dollars). This increase reflects Florida manufacturing workers increased productivity in real terms even while overall manufacturing activity is declining in the state. To conclude this article, we presented summary indicators for industrial productivity. The summary indicator is the percent of Gross State Product (GSP) that is contributed by manufacturing value-added. Florida and the three benchmark states all experienced a drop in the value of their indicators between 1997 and 2005. This drop signifies that manufacturing plays a shrinking part of these states' economies. 10


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