For the first time in many years, American manufacturing is doing better than the rest of the economy. Manufacturing output tumbled 15% over the course of the recession, from December 2007 to the end of June 2009. Since then it has recovered two-thirds of that drop; production is now just 5% below its peak level (see chart 1).Factory employment has been slower to recover than output, since productivity has risen. Nonetheless, that too is growing. In February factory payrolls rose by 33,000 from January. In the past year manufacturing employment has gone up by 189,000, or 1.6%, the biggest gain since the late 1990s. Total employment rose just 1% in that period. Unemployment has fallen more sharply than the national average in Illinois, Ohio and Michigan, which are relatively dependent on manufacturing.
America still makes things, even for export. But number of people required to make those things continues to drop. A reinvestment in manufacturing will not fuel a job recovery.
That lesson seems to be tough for Rust Belt states to learn. Those waiting for the return of manufacturing aren't paying attention. The output never went away. On the other hand, the jobs most certainly did.