Editorial
Manufacturing
By Steve Tuttle
While
reading the millenial spate of newspaper and
magazine retrospectives assessing North
Carolina's economic growth during the 1990s, I
was reminded of something Unifi Chairman Allen
Mebane IV said more than a year ago in our cover
story on manufacturing. Unifi and other large
textile concerns had survived foreign competition
by investing heavily in new technology. Mebane
said: “In 1968, with wages and fringe
benefits at $2.25 an hour, it cost us 14 cents a
pound (to produce yarn). Today, in Yadkinville,
with labor at $16 an hour, it costs us 4.3 cents
a pound.”
That's an impressive
gain in productivity, and it helps explain an
important but underreported aspect of the state's
sustained economic boom. The '90s were so strong
because everyone pulled an oar. Think how less
powerful the boom would have been if our
traditional industries hadn't adapted and not
only survived but thrived. Employment slipped a
bit but manufacturing today remains the largest
part of North Carolina's economy, generating more
than 35 percent of the state's gross domestic
product. In 1996, the latest year for which
complete U.S. Department of Commerce data are
available for all 50 states, manufacturing
contributed $55 billion to North Carolina's
economy. That's tops in the Southeast and
eighth-best in the nation.
Manufacturing
contributed 29 percent of U.S. GDP, adjusted for
inflation, between 1992 and 1997, more than any
other sector. Services contributed 19 percent;
transportation and utilities, 10 percent; and
finance, insurance and real estate, 13 percent.
U.S. economic growth
increased at an average rate of 3.1 percent in
the five years ending in 1997. In the same period
manufacturing's share grew at 5.2 percent
annually. Even more impressive is the continuing
increase in manufacturing productivity; it was
6.4 percent in 1999, outpacing every other
economic sector for the fourth straight year.
With unemployment the
lowest it's been in 30 years, manufacturing's
productivity gain is a big reason why inflation
has remained in check.
But such statistics numb
the mind, so perhaps an illustration of
manufacturing's achievement is more apt: In 1954
the average American had to work 562 hours to
earn enough money to buy a television set that
delivered a grainy, black and white picture.
Today the average American can buy a color set
with extensive features and a remote control for
just 23 hours of labor.
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