5 Best States for Manufacturing Based on Labor Force & Cost

August 2, 2022
August 2, 2022 Lauren

5 Best States for Manufacturing Based on Labor Force & Cost

The United States has long been a world leader in manufacturing, but the industry has undergone significant changes in recent years. Many companies have moved production to other countries where labor costs are lower, while others have automated their factories to reduce the need for workers. That’s not to mention the labor shortage in the manufacturing sector, which is predicted to only get worse in the next decade.

Despite these challenges, there are still many reasons to get into manufacturing in the U.S. The country has a large and skilled labor force and a variety of incentives for businesses. In addition, the United States is home to some of the best research and development facilities in the world.

So which states are the best for manufacturing? We looked at the study conducted by Site Selection Group, which identifies the 10 best manufacturing cities based on factors such as the cost of labor, the availability of skilled workers, and a business-friendly environment.

Best States for Manufacturing in the U.S.

Using its GeoCision analysis tool, Site Selection ranked the best manufacturing cities based on operating costs, labor demand, target skill sets, accessibility, presence of organized labor, and labor scalability. We identify the top five below:

1. South Carolina

One of the most notable is the state of South Carolina, which has emerged as a leading center for manufacturing jobs. South Carolina tops the list with a total index score of 132.83%. The state’s major industries include automotive manufacturing, aerospace manufacturing, and textile production.

In recent years, South Carolina has also seen a boom in the production of plastic goods. The state’s manufacturers have benefited from a skilled workforce, favorable tax policies, and proximity to major markets. State laws also make it difficult for unions to organize, which is another plus for businesses.

2. Utah

Utah, scoring 129.75%, is often lauded for its business-friendly environment, and the state’s manufacturing sector is no exception. Utah’s manufacturers enjoy low tax rates, access to a skilled workforce, and ample opportunities for growth. The state’s strategic location also makes it an ideal base for companies that serve markets in the western United States.

In recent years, Utah has been home to some of the nation’s fastest-growing manufacturing firms. The state’s aerospace and defense industries are particularly strong, thanks in part to the presence of Hill Air Force Base.

3. Georgia

As the birthplace of Coca-Cola and home to Delta Airlines, it’s no surprise that Georgia is one of the best states for manufacturing in the U.S. The state’s central location and proximity to major ports make it an ideal hub for distribution, while its skilled workforce and business-friendly environment attract leading companies from around the world. The state’s thriving manufacturing sector includes everything from aerospace and automotive to food and beverage production. In Site Selection’s study, Georgia scored 125.18%.

4. Alabama

Alabama’s pro-business environment, skilled workforce, and competitive costs of doing business make it an attractive location for manufacturers. In addition, the state’s infrastructure is well-suited to support manufacturing operations. The state has a strong transportation network, with access to major interstate highways, railroads, and ports.

Additionally, Alabama offers a variety of incentives for businesses, including tax breaks and financial assistance. It scored fourth in Site Selection’s roster, with 125.16%.

5. Florida

Florida, which scored 124.76%, has a strategic location with access to major markets and transportation hubs. In recent years, the state has seen significant growth in the manufacturing sector, with new businesses relocating to Florida or expanding their operations here. This trend is likely to continue, making Florida an attractive option for businesses in the manufacturing industry.

Operating Costs and Labor Demand

While the overall index reflects the hierarchy above, in terms of more specific parameters such as operating expenses and labor demand, the rankings among the top five shift to reflect the following:

Operating Cost

Utah: 138.2%

Florida: 131.8%

Georgia: 124.24%

Alabama: 121.43%

South Carolina: 121.34%

The state with the highest operating cost is South Dakota, with a score of 140.38%.

Labor Demand

Alabama: 136.26%

Utah: 115.11%

South Carolina: 108.06%

Georgia: 98.02%

Florida: 94.58%

The state with the highest labor demand is Louisiana, which scored 150.89%.

As the data shows, when it comes to the best states for manufacturing, there is no one-size-fits-all formula. The best location for a manufacturing company depends on a variety of factors, including the company’s specific needs and priorities. As for jobs, the best states for manufacturing are those with a skilled workforce and favorable business environment.

Find Solutions With TruPath

When searching for the best manufacturing jobs, be sure to partner with a trusted recruiting firm like TruPath. We can connect you with top manufacturing companies in the nation and help you find a position that’s best suited for your skills and experience. If you own or manage a manufacturing company, we can help you find the best candidates to fill your open positions.

Submit your resume today, or contact us to learn more about our recruitment services.