Maryland Manufacturing, an Economic Force to be Fostered

By January 22, 2009Economy, Energy, Taxation

The Manufacturers’ Alliance of Maryland has released a new report, “Manufacturing in Maryland — The Cornerstone of Shared Prosperity,” on the major economic contributions made by manufacturing in the state and the policies that are needed to maintain the sector’s viability. (The full .pdf report is here.)

At the top level:

In Maryland, there is a perception that manufacturing represents an important part of the state’s economic past, but not necessarily its future. This notion is reinforced by figures that show by 2006 only 5.3 percent of Maryland’s nonfarm jobs were in manufacturing, ranking the state 43rd in the nation and behind all states of the Mid-Atlantic region. Employment declines have been particularly pronounced in textile, apparel, and metal manufacturing.

Yet, there is a staggering disparity between these facts and the importance of manufacturing to
prosperity in Maryland. Between 1996 and 2006, average manufacturing wages in Maryland rose 48.3 percent, more than the corresponding statistic for the overall state economy. The implication is that even as the number of Maryland workers employed in manufacturing has declined, the demand for higher-skilled workers has been
on the rise. As a result, the number of workers employed in the sector remains significant as are the total sales, export values and the tax revenues generated by manufacturing.

And what’s needed?

Provide a competitive and stable business and regulatory environment
As a foundational principle, Maryland must have a stable and competitive business climate, especially in relation to neighboring states. Investment decisions take into account both current business climate issues such as a competitive tax and regulatory climate and the stability of that climate. Therefore, it is important for Maryland to maintain both an attractive and stable business climate to continue to attract capital investment, thereby fueling high-wage and mediumwage job creation.

In 2007 Forbes Magazine ranked all 50 states in terms of best states for business. Maryland ranked 12th best overall, but within that ranking Maryland was 41st in terms of business costs. To the extent that state government can assist manufacturers by providing them with access to competitive tax rates, reliable and competitively priced energy, assistance with health care costs and with a regulatory environment that does not overly burden producers vis-à-vis their competitors in neighboring states, it should do so.

The Maryland Gazette suburban newspapers (in this case the Wheaton edition) cited the new report in a story surveying the state’s manufacturing climate, a good account Wednesday, “Manufacturers get by with less.”

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