The Great Lakes states remain a manufacturing powerhouse. Manufacturing remains at the center of the Great Lakes economy. An important measure for these regions is their concentration in the company’s industry. Industry clusters are regional concentrations of related industries.[i] Clusters consist of companies, suppliers, and service providers, as well as government agencies and other institutions that provide education, information, research, and technical support to a regional economy.[ii] A Location quotient is an indicator of the economic concentration of a certain industry in a state, region, county, or city compared to a base economy, such as a state or nation that measures industry clusters in a region. A location quotient greater than 1 indicates the concentration of that industry in the area.
The Great Lakes states maintain a substantial manufacturing strength in a range of industries. The Great Lakes states of Indiana, Illinois, Michigan, Ohio, Pennsylvania, and Wisconsin have at or near double the national average of jobs in primary metal, plastics, and rubber products, machinery, fabricated metal product manufacturing, paper, electrical equipment, appliance and component, transportation equipment, printing and related support activities, and furniture and related product manufacturing as illustrated by the table below. In fact, these states are above the national average in nearly every industry category measured by the Bureau of Labor Statistics, and with the development of the Intel “fab” project in Ohio and several Electric Vehicle battery and supply chain projects in the region, the manufacturing base of employers should remain strong for the Great Lakes states.
Source: Bureau of Labor Statistics
The Great Lakes states, if measured by a combined Illinois, Michigan, Ohio, Indiana, Wisconsin, and Minnesota—exported a total trade dollar value of $295.4 billion in 2022, an advance of 12.7 percent from 2021.[iii] Prices for the largest export industry in the Great Lakes region, transportation equipment manufacturing, increased in July 2023, and machinery manufacturing export prices also advanced over the same period, and the export price index for chemical manufacturing decreased.[iv]
The Great Lakes states exported a combined trade dollar value of $295.4 billion in 2022, accounting for 14.3 percent of total U.S. exports, and transportation equipment manufacturing was the largest 2022 export industry in the Great Lakes, with the region representing 26.5 percent of total U.S. exports by trade dollar value for the industry.[v] The top 6 Great Lakes export industries of transportation equipment manufacturing, chemical manufacturing and machinery manufacturing accounted for 70.3 percent of the region’s U.S. total export trade value in 2022.[vi] The top 3 exporting states within the Great Lakes region—Illinois, Michigan, and Ohio—represented 9.5 percent of total U.S. exports by trade dollar value.[vii] Illinois accounted for 26.5 percent of total Great Lakes exports, while Michigan and Ohio represented 20.7 percent and 19.1 percent, respectively.[viii] Indiana, Wisconsin, and Minnesota combined for 33.8 percent of Great Lakes exports by trade dollar value in 2022.
The Great Lakes states of Illinois, Indiana, Michigan, Ohio, Pennsylvania, and Wisconsin remain an economic development powerhouse, particularly in the field of manufacturing. Manufacturing jobs, known as production jobs for federal government wage analysis purposes, pay on average $43,000 constituting high-wage jobs.
As the table below illustrates, the Great Lakes states all have a higher-than-average number of manufacturing production jobs with Indiana leading the list of having a higher concentration of manufacturing jobs than other Great Lakes states.
Source: Bureau of Labor Statistics
In fact, Indiana has the highest concentration of manufacturing production workers in the United States with Wisconsin coming in second. The Great Lakes states continue to have a higher manufacturing and production worker wage rate than their southern state competitors as illustrated by the table below.
However, this higher manufacturing wage rate has not stopped the Great Lakes states from remaining a global manufacturing center. The top 10 U.S. manufacturing states include many of the Great Lake’s states, but also other Midwest and Southern states as illustrated by the table below. The inclusion of Kentucky, Mississippi, Alabama, and South Carolina in the top 10 U.S. manufacturing states list illustrates the success of the southern states over the last fifty years but the Great Lakes and Midwest remain strong industrial markets.