Staff Report
Published Dec. 10, 2009

Despite the pressures of the recession and despite its status as an economic sector in transition, manufacturing continues to constitute the largest industry cluster in South Carolina, according to a new economic impact study by Miley Gallo and Associates LLC.

The data showed almost 5,200 manufacturing establishments in the state in 2008. That is 4.5% of all establishments, though the manufacturers paid more than 20% of all wages paid in South Carolina, and constituted more than 15% of all jobs.

“The benefits and economic impact of manufacturing in South Carolina are great — historically and today,” Robert M. Hitt, chairman of the S.C. Manufacturers Alliance, wrote in the introduction to the new study, which his group commissioned. “Contrary to what we too often hear and see in the public dialogue, manufacturing still matters, and the growth potential for South Carolina’s manufacturing sector is significant.”

Some highlights of the study include:

• Total direct and indirect impacts of manufacturing were $141 billion per year. Direct impact was more than $95 billion, and indirect impact was $46 billion.
• Manufacturers pay 13% of all property taxes statewide. In some counties, the manufacturers’ share is more than 50%. Calhoun County, for example, reaps 62% of property taxes from manufacturers.

Employment trends show a declining but important manufacturing base in several key areas of the state:

Manufacturing, however, has not grown at a pace with the rest of the economy, the data show. Although the gross state product for all industries increased 52% during the past decade, manufacturing grew by 6%.

For those still employed in manufacturing, wages remain among the highest in the state. The average manufacturing wage of $46,192 is more than 27% above the statewide average, the report states.

Direct labor income from manufacturing amounts to almost $16.5 billion.

Adding new manufacturing will continue to be an important part of the state’s economic development strategy, the study indicates.

The Miley Gallo study suggests that the addition of another auto parts maker with 200 employees would have a direct economic output of $57.3 million and additional indirect economic impact of $26.8 million.

“Manufacturing provides good jobs for our state’s residents with wages that are substantially higher than nonmanufacturing jobs,” said Hitt, who is also chief spokesman for BMW Manufacturing near Greer. “Manufacturing has a greater multiplier effect on the rest of our economy than any other industry sector. Also, manufacturing drives private-sector development and innovation — leading to advanced technologies and products that improve our quality of life.

“Manufacturing still matters in South Carolina,” Hitt continued. “It will remain well into the future, but only if we recognize its value and promise and are willing to provide the competitive environment and tools necessary for manufacturers to flourish in today’s fast-paced and ever-changing world.

“With all that manufacturing has to offer and its critical role in our economy, it is imperative that state leaders, policymakers, media, and the public understand its benefit and the impact of our collective decision-making and perceptions on its future here,” Hitt said.