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Report: S.C. ranked high in manufacturing industry health

Manufacturing
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South Carolina ranks high in manufacturing industry health and global reach, but low in human capital and worker benefit costs, according to a report from The Center for Business and Economic Research at Ball State University.

The report graded the state on nine different categories related to the manufacturing industry and the state scored high marks for the production of consumer durable and non-durable goods as well as the level of international trade – both imports and exports – in the state.

In terms of measuring manufacturing health, the survey looked at the last 10 years of production. The health was dependent on transportation infrastructure, non-wage labor costs, access to innovative technologies and the cost of doing business. South Carolina has achieved an “A” grade since 2013.

In the region, South Carolina achieved the highest rank of any other state. Nationwide, only Kentucky, Indiana, Michigan and Iowa earned an “A” grade in industry health. Georgia and Florida earned the lowest grades in the region with a “D” while North Carolina earned a “C” and Tennessee, Alabama and Mississippi earned a “B” grade.

In global reach, South Carolina had the highest marks in the region – along with Tennessee and Kentucky - with an “A.” Florida and Mississippi had the lowest marks in the region with both states earning a “D” while Alabama, Georgia and North Carolina each earned a “B.” The report looked at per capita exported manufacturing goods and the growth of manufacturing exports as part of the criteria.

According to the report, South Carolina ranked equal to other states in the South in the category of logistics industry health. The state, along with Florida, North Carolina, Tennessee, Mississippi and Alabama, earned a “C” grade while Georgia and Kentucky had a “B” grade. Pennsylvania, Ohio, Indiana, Illinois and Texas were the only states to receive an “A.”

“To measure the health of the logistics industry, we include the share of total logistics industry income as a share of total state income, and the employment per capita,” the report said.

South Carolina was on par with other states in the South in human capital as the Palmetto State was joined with Georgia, Tennessee and Kentucky with a “D” grade. Only North Carolina and Florida earned a higher grade with each state getting a “C” grade. Mississippi and Alabama each picked up an “F” grade.

“No factor matters more to businesses than the quality and availability of labor,” the report said. “Workers represent the largest single cost of doing business, but, more importantly, they are the source of most innovation and process improvements that distinguish successful firms from those that are not successful.”

The report looked at “educational attainment, first-year retention rates of adults in community and technical colleges, the number of associate’s degrees awarded annually on a per capita basis and the share of adults enrolled in basic adult education.”

The state ranked the lowest in the region in the category of worker benefit costs. According to the report, South Carolina and Kentucky each earned a “D” grade while Georgia and North Carolina each earned a “B” grade and Florida, Tennessee, Alabama and Mississippi had a “C” grade.

“Non-wage labor costs represent an increasingly important part of total business costs,” the report said. “These are affected by local and state public policy (laws), as well as worker demographics and health, and industry and firm performance.”

South Carolina held its “B” grade in sector diversification – a grade unchanged since 2012 – but did raise its productivity and innovation grade from a “C-“ in 2015 to a “C” in 2016. The state’s tax climate received a “C-“ and the expected liability gap earned a “B” grade.

Reach Matthew Clark at 864-235-5677, ext. 107.

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