Manufacturing 2.0: A More Prosperous California

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Washington


Washington's manufacturing real GDP totaled $27.5 billion, or 10.5 percent of the state’s real GDP in 2007, about half of it from high-tech manufacturing. Washington’s manufacturing real GDP climbed 8.5 percent from 2000 to 2007. With the large presence of aerospace- and computer-related companies, the state attracts millions in venture capital investments annually, and industrial research and development spending has grown as well, by 5.1 percent from 2000 to 2007. Manufacturers’ capital spending grew, one of just two peer states where that factor increased.

Manufacturing employment in the Evergreen State totaled 293,200 jobs, or 2.1 percent of the nation’s total in 2007, and 38 percent of it was in high-tech. Like California, Washington has a large aerospace presence. Both states suffered greatly in the 1990s when the industry severely contracted, and both have numerous computer and electronics manufacturers that lost thousands of jobs when the tech bubble burst. Washington manufacturing has rebounded modestly in recent years after bottoming out in 2004. Washington’s share of U.S. high-tech manufacturing employment was 4.46 percent in 2007, well above the national average of 2.0 percent.

Because of the large number of workers in high-tech manufacturing, the average wage of $60,515, a 22 percent increase since 2000, was more than in most states. The value added per production worker in the state was $295,559 in 2007, more than the California and U.S. averages.

Manufacturing employment index (2000-2007)
State 2000 2001 2002 2003 2004 2005 2006 2007
California 100.00 96.01 88.08 83.25 82.11 81.10 80.31 78.98
Washington 100.00 95.26 85.88 80.47 79.44 82.13 86.15 88.35
United States 100.00 95.22 88.37 84.03 82.91 82.40 82.00 80.41

Sources: U.S. Bureau of Labor Statistics, Moody's Economy.com, Milken Institute.

Top five indicators
Indicator United States
Value
WA
Value
%
Change
Peer State
Rank
Real gross state product (US$ billions) $11,523.9 $261.1 17.6% 5
Per capita personal income (US$) $38,615 $4,1203 29.7% 2
Total exports of goods (US$ billions) $1,162.5 $66.4 106.0% 1
Manufacturing's share of real GDP (%) 13.6% 10.5% -7.8% 7
Real manufacturing output per worker (US$ thousands) $113.6 $95.1 23.2% 6

Sources: Bureau of Economic Analysis, Bureau of Labor Statistics, U.S. Census Bureau, Milken Institute.
Note: Data are 2007 figures, unless stated otherwise. The rankings are among the eight peer states, 1 = best and 8 = worst, based on the growth rate between 2000 and 2007.

Economic climate indicators
Indicator United States
Value
WA
Value
%
Change
Peer State
Rank
Real gross domestic product (US$ billions) $11,523.9 $261.1 17.6% 5
Total nonfarm employment (thousands, SA) $13,7604.3 $2,933.7 8.2% 3
Total exports of goods (US$ billions) $1,162.5 $66.4 106.0% 1
Per capita personal income (US$) $38,615 $41,203 29.7% 2
Median household income (US$) $50,740 $55,628 21.5% 5

Sources: Bureau of Economic Analysis, Bureau of Labor Statistics, U.S. Census Bureau, Milken Institute.
Note: Data are 2007 figures, unless stated otherwise. The rankings are among the eight peer states, 1 = best and 8 = worst, based on the growth rate between 2000 and 2007.

Business climate indicators
Indicator United States
Value
WA
Value
%
Change
Peer State
Rank
Corporate income tax rate 15.0% -35.0% 0% -- 1
Individual income tax rate 10.0% -35.0% 0% -- 1
Property tax rate 13.8% 1.13% -- 2
Sales tax rate 0% 6.5% 0.0% 7
Employer unemployment insurance tax rate 0.66% 1.12% -0.9% 7
Total state-local tax burden rate 9.9% 9.1% 7.1% 3
Per capita total state-local taxes paid (US$) $4,223 $4,248 34.0% 6
Government debt as % of GDP 65.5% 6.8% 28.3% 6
Per capita government spending (US$) $14,327 $5,738 30.6% 6
Nonfarm establishments (latest 2006) 7,601,160 $179,908 9.7% 4

Sources: Bureau of Economic Analysis, The Tax Foundation, U.S. Census Bureau, U.S. Office of Management and Budget, Milken Institute.
Note: Data are 2007 figures, unless stated otherwise. The rankings are among the eight peer states, 1 = best and 8 = worst, based on the growth rate between 2000 and 2007.

Manufacturing indicators
Indicator United States
Value
WA
Value
%
Change
Peer State
Rank
Manufacturing share of real GDP 13.6% 10.5% -7.8% 7
High-tech manufacturing share of real GDP 4.8% 5.1% 1.4% 8
Manufacturing employment (thousands) 13,882.6 293.2 -11.7% 3
High-tech manufacturing employment (thousands) 2,468.7 110.2 -13.3% 5
Share of U.S. high-tech manufacturing employment 2.0% (U.S. avg.) 4.46% 7.7% 5
Manufacturing wage per employee (US$) $53,804 $60,515 21.7% 6
Manufacturers' capital expenditures (US$ billions) $135.8 $3 14.9% 2
Industrial R&D expenditures (US$ billions, 2005) $226.2 $9.7 5.1% 8
Real manufacturing output (US$ billions) $1,571.7 $27.5 8.5% 7
Real manufacturing output per worker (US$ thousands) 113.6 95.1 23.2% 6
Value added per production worker (US$) $249,139 $295,559 62.6% 3
Exports of manufactured goods (US$ billions) $1,022.1 $57.4 100.3% 1

Sources: Bureau of Economic Analysis, Bureau of Labor Statistics, The National Science Foundation, U.S. Census Bureau, Milken Institute.
Note: Data are 2007 figures, unless stated otherwise. The rankings are among the eight peer states, 1 = best and 8 = worst, based on the growth rate between 2000 and 2007.
Leading business and economic indices
Indicator Peer State
Rank
National
Rank
State Business Tax Climate Index (Tax Foundation) 4 11
Best & Worst States [to do business] Survey (Chief Executive Magazine) 7 40
Competitiveness Index (Beacon Hill Institute) 2 7
Economic Competitiveness Index (American Legislative Exchange Council) 2 5
2007 State and Local Tax Burden (Public Policy Institute of New York) 6 32
Economic Freedom Index (Pacific Research Institute) 6 31
Small Business Survival Index (Small Business & Entrepreneurship Council) 1 5
2007 Cost-of-Doing-Business Index (Milken Institute) 6 35
State New Economy Index (Kauffman Foundation) 1 2
State Technology & Science Index (Milken Institute) 2 5

Note: Indices cited were published in 2008, unless otherwise stated. Some index rankings results were reversed from published rank in order to make them consistent across the different indices as presented here. The rankings are among the eight peer states, 1 = best and 8 = worst.
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