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Industrial Market Getting Some Traction But Five States Enjoying Much of the Boost

Aug. 26, 2017
EM’s Electrical Sales Potential (ESP) data shows that regional pockets of industrial strength do exist.

Industrial employment hasn’t fully recovered from its decline since the 2008-2009 recession, but EM’s Electrical Sales Potential (ESP) data shows that regional pockets of industrial strength do exist.

U.S. manufacturing employment through June 2017 stands at 12.5 million, up about 2% year-to-date, but down -9.9% from 2007 and off a staggering -27.6% since 2000. For the purposes of estimating electrical sales potential, each one of those employees represents some serious buying power — $690 for industrial MRO;  $722 for OEM; and $43 in potential for factory automation.

As you can see in the chart below, which lists the Metropolitan Statistical Areas (MSAs) with year-over-year increases of at least $1 million in their total industrial sales potential (MRO, OEM and Factory Automation combined), the geographic mix of the faster-growing industrial markets is fairly diverse. Forty-two of the MSAs are in 20 states, but five states—Texas, Michigan, Ohio, Indiana and Florida—account for 53% of the year-over-year (YOY) increase in total industrial sales potential.

The MSAs in the states with the biggest YOY increases in manufacturing employment include Houston-The Woodlands-Sugarland, TX (+8,167 employees); Columbus, OH (+4,233 employees); Grand Rapids-Wyoming, MI (+3,733 employees); and Elkhart, IN (+3,567 employees).  Houston’s increase of over 8,000 manufacturing employees sticks out. Many of the jobs are most likely related to the gradual recovery in the metro’s oil industry, which according to a report on the Houston economy by the Bauer College of Business at the University of Houston has added back about 10,000 of the more than 77,000 oil-related jobs it lost from 2014 to 2016.

Notes: All sales potential estimates calculated using Electrical Wholesaling sales -per-employee multipliers. Employment data is a 3-month moving average (April-June 2017) of employment data provided by U.S. Bureau of Labor Statistics.