Manufacturing in Louisville and Its Peer Metropolitan Areas Results by knu24191


									      Manufacturing in Louisville
   and Its Peer Metropolitan Areas:
Results from the 2002 Economic Census

                    a report for

             Greater Louisville, Inc.


                 Barry Kornstein
             Senior Research Analyst
            Department of Economics
               College of Business
             University of Louisville

                  February 2006

   research sponsored by a grant from National City
                        Manufacturing in Louisville
                     and Its Peer Metropolitan Areas:
                  Results from the 2002 Economic Census


     This report summarizes the results of the 2002 Economic Census for Louisville and its fifteen
competitor peer metropolitan areas. The Economic Census provides a detailed portrait of the
nation's economy once every five years, from the national to the local level. Census forms are
mailed to more than 5 million companies. There are over 600 versions of the census form, each
customized to particular industries. Only some very small companies do not receive a census
form. The Economic Census provides the best snapshot we have of the various industries making
up the economy, and since all measurements utilize a single standard nationwide it is the easiest
and most consistent way to compare the industrial composition of disparate localities. The set of
competitor peer metropolitan areas for Louisville was constructed with the input of business and
government leaders and we have used the concept in numerous previous reports on multiple
     In general, following the national trend, the manufacturing sector in the Louisville metro-
politan area contracted from 1997 to 2002. The chart on the next page compares Louisville to the
national situation in terms of some key indicators of industry performance. While Louisville
underperformed the national average in terms of the number of manufacturing establishments, the
Louisville region suffered a smaller loss of jobs and saw real wages rise at a greater rate than the
national average for both production and non-production workers. On the other hand, the re-
ported value added of the Louisville manufacturing sector was just half that reported in 1997,
while the value added for the nation increased a small bit. While capital expenditures were off by
16.5 percent nationally, in Louisville they decreased an extra 20 percent. It must be said, however,
that much of the decrease in value added may be due to a data input error and capital expenditures
are very lumpy from year to year.
     The Louisville thirteen county metropolitan area had about 83,300 manufacturing jobs in
2002. This was a drop of nearly ten percent from the 92,000 jobs reported in the 1997 Economic
Census for those same counties. Half of the manufacturing employment is in four of the 21 manu-
facturing subsectors; transportation equipment (20.9%), fabricated metal products (12.4%), food
(8.9%), and printing and related support activities (7.7%).
     With respect to its peer group of metro areas, Louisville most often ranks among the pack in
the middle. In general, Louisville is most like the peer metro areas that are closest to it geographi-
cally (Cincinnati, Indianapolis, Nashville, Dayton, Columbus, with the addition of Kansas City),
and most unlike Greensboro, Raleigh-Durham, and Richmond.

      Manufacturing in Louisville and Its Peer Metropolitan Areas: Results from the 2002 Economic Census   1
                          Manufacturing in the Louisville MSA
                             Compared to the United States
                          Change from 1997 to 2002 (1997=100)
                     Number of establishments

                         Number of employees

                Number of production workers                                   85.6

            Number of non-production workers

              Inflation adjusted Payroll per job

          Inflation adjusted Production worker                                           106.0
                      wages per job                                                       108.4

          Inflation adjusted Production worker                                            107.3
                     wages per hour                                                        110.3

             Inflation adjusted Non-Production                                         102.6
                     worker pay per job                                                 104.7

                                   Value added

                           Value added per job

           Value added per production worker                    56.6

                     Total capital expenditures

                 Total capital expenditures per                             75.6
                        establishment                                61.7

                                                   10   40           70            100           130
                                                        Index value, 1997=100
                                                        Louisville     United States

2   Manufacturing in Louisville and Its Peer Metropolitan Areas: Results from the 2002 Economic Census

     In December 2003 the United States Office of Management and Budget instituted a revised
classification system for MSAs, which now includes micropolitan areas as well as metropolitan
areas. Each metropolitan statistical area must have at least one urbanized area of 50,000 or more
inhabitants. Each micropolitan statistical area must have at least one urban cluster of at least
10,000 but less than 50,000 population. Counties are the building blocks of the statistical areas,
with additional “outlying counties” included in the metro or micro area if they meet specified
requirements of commuting to or from the central counties. The new definitions also utilized
2000 Census population and commuting data.
    In practice this meant that in many cases one or more outlying counties were dropped from a
metro area definition while one or more others were added. Sometimes a dropped county became
a new micropolitan area. In a few cases a metro area was split up into two or more metro areas or
a combination of metro and micro areas.

                       Metropolitan Area Definition Reconciliation, 1997 to 2002
                        1997 Definition                               2002 Definition
         Birmingham, AL MSA                            Birmingham-Hoover, AL MetroSA
         Charlotte-Gastonia-Rock Hill, NC-SC MSA       Charlotte-Gastonia-Concord, NC-SC MetroSA
                                                       Lincolnton, NC MicroSA
                                                       Salisbury, NC MicroSA
         Cincinnati, OH-KY-IN PMSA                     Cincinnati-Middletown, OH-KY-IN MetroSA
         Columbus, OH MSA                              Columbus, OH MetroSA
         Dayton-Springfield, OH MSA                    Dayton, OH MetroSA
                                                       Springfield, OH MetroSA
         Greensboro-Winston Salem-High Point, NC MSA   Greensboro-High Point, NC MetroSA
                                                       Winston-Salem, NC MetroSA
                                                       Burlington, NC MetroSA
                                                       Lexington-Thomasville, NC MicroSA
         Indianapolis, IN MSA                          Indianapolis, IN MetroSA
                                                       Anderson, IN MetroSA
         Jacksonville, FL MSA                          Jacksonville, FL MetroSA
         Kansas City, MO-KS MSA                        Kansas City, MO-KS MetroSA
         Lexington, KY MSA                             Lexington-Fayette, KY MetroSA
                                                       Richmond, KY MicroSA
         Louisville, KY-IN MSA                         Louisville, KY-IN MetroSA
                                                       Scottsburg, IN MicroSA
         Memphis, TN-MS-AR MSA                         Memphis, TN-MS-AR MetroSA
         Nashville, TN MSA                             Nashville-Davidson-Murfreesboro, TN MetroSA
         Omaha, NE MSA                                 Omaha-Council Bluffs, NE-IA MetroSA
         Raleigh-Durham-Chapel Hill, NC MSA            Raleigh-Cary, NC MetroSA
                                                       Durham, NC MetroSA
         Richmond-Petersburg, VA MSA                   Richmond, VA MetroSA

      Manufacturing in Louisville and Its Peer Metropolitan Areas: Results from the 2002 Economic Census   3
         Among Louisville and its peer metros this created significant disjunction between the 1997
    and 2002 Economic Census area definitions for Charlotte, Dayton, Greensboro-High Point,
    Indianapolis, Lexington, Louisville, and Raleigh-Durham. In order to facilitate more accurate
    historical comparison we adjusted the 2002 data to make sure that every county in the 1997 area
    definitions was included in this analysis. This usually involved adding micropolitan data to a
    metropolitan area. The table shows how we reconciled the different metro definitions. The
    figures reported in this analysis for each metro area include data from every county in the 1997
    metro definition. There may, however, be additional counties included that were not part of the
    1997 metro definition. These extra counties are on the fringes of each metro area, so they most
    likely do not contribute very many manufacturing jobs. While the 1997 and 2002 manufacturing
    information should now be aligned in a fairly unbiased way to facilitate comparison, the extra
    outlying counties can add to the 2002 population figures to such a degree that population-based
    historical comparisons should be taken with a grain of salt.
         It should be noted that if any metro area benefits in the comparisons from the addition of
    extra outlying counties it is Louisville, which added seven counties, including Shelby County.

    EMPLOYMENT &            EMPLOYMENT CHANGE                  97-02
         The Louisville MSA had 83,279 manufacturing employees in 2002, a 9.5 percent decrease
    from 1997. In the overall manufacturing employment data we have adjusted the 1997 totals to
    include all the additional counties added to the MSA definitions in 2002.
          Of the 16 peers, Louisville has the
    sixth most manufacturing employees.
    Cincinnati and Greensboro have by far                            Manufacturing Employees, 2002
    the most manufacturing employees. At
    the other end of the spectrum, Jackson-                        Jacksonville, FL        32,231

    ville, Omaha, Birmingham, Memphis,                              Omaha, NE-IA           33,934
    and Richmond have relatively few                                Lexington, KY            41,117
    manufacturing employees. Mirroring                            Birmingham, AL              44,106
    the national trend, every one of the                     Memphis, TN-MS-AR                 46,851
    MSAs lost manufacturing jobs from                               Richmond, VA                   49,685
    1997 to 2002. While nine of the 16                                                                63,268
                                                               Raleigh-Durham, NC
    peers did better than the nation as a
                                                            Dayton-Springfield, OH                          74,521
    whole, only Omaha and Jacksonville,
                                                                     Nashville, TN                           81,093
    the MSAs with the smallest number of
                                                                    Columbus, OH                             81,187
    manufacturing jobs, came close to
                                                                 Louisville, KY-IN                             83,279
    breaking even. Louisville was right in
                                                              Kansas City, MO-KS                               86,631
    the middle of the pack, with the sev-
    enth best performance of the peer                              Indianapolis, IN

    metros.                                                       Charlotte, NC-SC                                       109,881

                                                             Cincinnati, OH-KY-IN                                              125,193

                                                     Greensboro-Winston-Salem, NC                                                  138,839

                                                                                      0   40,000        80,000          120,000     160,000
                                                                                             Number of employees

4         Manufacturing in Louisville and Its Peer Metropolitan Areas: Results from the 2002 Economic Census
                                                                                                           The big losers were Memphis,
               Manufacturing Employees,                                                               Charlotte, Dayton-Springfield, and
           Change from 1997 to 2002 (1997=100)                                                        Raleigh-Durham which lost 24.5, 20,
                                                                                                      19.6, and 19.4 percent of their manufac-
        Memphis, TN-MS-AR                                 75.5                                        turing employment, respectively, from
             Charlotte, NC-SC                                  80.0
                                                                                                      1997 to 2002.
       Dayton-Springfield, OH                                      81.4

          Raleigh-Durham, NC                                       81.6

             Birmingham, AL                                          84.2

Greensboro-Winston-Salem, NC                                          85.0                            EMPLOYMENT         PER CAPITA AND
               Richmond, VA                                            86.2
                                                                                                      EMPLOYMENT PER CAPITA
        Cincinnati, OH-KY-IN                                                89.0

         Kansas City, MO-KS                                                  90.2
                                                                                                      CHANGE     97-02
            Louisville, KY-IN                                                  90.5

                Nashville, TN                                                  90.7                        Louisville had about 69 manufac-
               Lexington, KY                                                   91.1                   turing jobs per one thousand people in
              Indianapolis, IN                                                   92.8                 2002, fourth most among the peer
               Columbus, OH                                                      92.8                 metros. Greensboro, Lexington, and
              Jacksonville, FL                                                      95.1              Dayton have the highest concentrations
               Omaha, NE-IA                                                             97.7          of manufacturing jobs, with
                United States                                             87.4                        Greensboro’s rate of manufacturing
                                 50      60      70           80          90          100       110
                                                                                                      jobs per capita being double the nation-
                                                                                                      wide rate of 50 jobs per thousand
                                                                                                      people. Half of the peer metros have
                                                                                                      more manufacturing jobs per capita
                                                                                                      than the national average. The peer
                                                                                                      metros with the fewest such jobs per
                    Manufacturing Employees
                                                                                                      capita are Jacksonville (about 27 per
                    per 1,000 Population, 2002
                                                                                                      thousand people), Memphis (just under
              Jacksonville, FL                26.79
                                                                                                      38 per thousand people), and Birming-
        Memphis, TN-MS-AR                         37.80
                                                                                                      ham (roughly 41 per thousand people).
             Birmingham, AL                           41.12                                           Memphis and Birmingham were among
               Omaha, NE-IA                           42.78                                           the biggest manufacturing job losers
               Richmond, VA                            43.65                                          from 1997 to 2002. Charlotte and
         Kansas City, MO-KS                            45.48                                          Dayton were also among the biggest
          Raleigh-Durham, NC                            47.51                                         job losers, but they still rank much
               Columbus, OH                              48.48                                        higher than average in terms of per
              Indianapolis, IN                                 58.45                                  capita manufacturing employment.
                Nashville, TN                                  59.14

        Cincinnati, OH-KY-IN                                     61.15                                     Change in manufacturing jobs per
             Charlotte, NC-SC                                       67.06                             thousand people from 1997 to 2002 can
            Louisville, KY-IN                                        68.62                            be interpreted as an indicator of how
       Dayton-Springfield, OH                                             75.32                       quickly a regional economy is moving
               Lexington, KY                                                 80.04                    away from its previous level of reliance
Greensboro-Winston-Salem, NC                                                               100.03     on the manufacturing sector for em-
                United States                             50.52
                                                                                                      ployment. Nationwide, the level of
                                 0       20      40           60          80          100       120   manufacturing jobs per capita dropped
                                      Number of employees per 1,000 population                        by nearly 20 percent from 1997 to

     Manufacturing in Louisville and Its Peer Metropolitan Areas: Results from the 2002 Economic Census                                          5
    2002, from about 63 to 50.5 jobs per
    thousand people. Half of the peer                                Manufacturing Employees
    metros experienced a slower rate of                                 per 1,000 Population,
    change away from manufacturing in                           Change from 1997 to 2002 (1997=100)
    their economies, but only one, Colum-
    bus, was more than just a little different                    Charlotte, NC-SC                         67.6
    from the national rate. The Charlotte,                     Raleigh-Durham, NC
                                                             Memphis, TN-MS-AR                                  70.3
    Raleigh-Durham, and Memphis econo-
                                                                    Richmond, VA                                           75.2
    mies have been making the swiftest
                                                     Greensboro-Winston-Salem, NC                                            77.2
    transitions away from manufacturing                                                                                      77.3
                                                                  Birmingham, AL
    employment. In those metros the                                  Nashville, TN                                                79.5
    current level of manufacturing employ-                          Lexington, KY                                                 80.0
    ment per capita is at least 30 percent                         Jacksonville, FL                                                 81.4
    less than it was just eight years ago.                  Dayton-Springfield, OH                                                  82.0

                                                              Kansas City, MO-KS                                                    82.0

                                                             Cincinnati, OH-KY-IN                                                   82.2

                                                                   Indianapolis, IN                                                  82.8
    ESTABLISHMENTS          PER CAPITA                           Louisville, KY-IN                                                       84.3

                                                                    Omaha, NE-IA                                                          84.7
                                                                    Columbus, OH                                                                     91.3
    CAPITA CHANGE          97-02                                     United States                                                 80.5

                                                                                      50           60          70             80                90             100
         This data reinforces the snapshot
    and trends seen in the employment
    data. Louisville had 1.23 manufacturing
    establishments per one thousand people
    in 2002, fifth most among the sixteen
                                                                      Manufacturing Establishments
    peer metros, which is right about the
                                                                       per 1,000 Population, 2002
    national average. Greensboro, Dayton,
    and Charlotte have the most establish-                                                                          0.74
                                                                   Jacksonville, FL
    ments per capita. Lexington has a level                  Memphis, TN-MS-AR                                             0.89
    of establishments per capita quite a bit                   Raleigh-Durham, NC                                          0.93
    lower than the national average despite                         Richmond, VA                                            0.93
    also having a relatively high level of                          Omaha, NE-IA                                            0.94

    manufacturing employment per capita,                            Columbus, OH                                             0.97

    indicating that the Lexington market is                         Lexington, KY                                                 1.05

    weighted pretty heavily towards large                          Birmingham, AL                                                 1.06

    firms. Jacksonville and Memphis have                      Kansas City, MO-KS                                                    1.14

    the lowest number of manufacturing                               Nashville, TN                                                  1.16

                                                                   Indianapolis, IN                                                  1.16
    firms per capita.
                                                                  Louisville, KY-IN                                                       1.23
         The number of manufacturing                          Cincinnati, OH-KY-IN                                                         1.30

    establishments per capita nationwide                          Charlotte, NC-SC                                                               1.41

    has been increasing; it’s nearly two                    Dayton-Springfield, OH                                                                      1.56

    percent higher now than in 1997, but             Greensboro-Winston-Salem, NC                                                                              1.71

    not in any of the peer metros. The                               United States                                                       1.20

    trend is markedly in the opposite                                                 0.0    0.2   0.4   0.6    0.8        1.0      1.2     1.4       1.6      1.8
                                                                                           Number of establishments per 1,000 population

6         Manufacturing in Louisville and Its Peer Metropolitan Areas: Results from the 2002 Economic Census
                                                                                                        direction for the peer metros, with all
              Manufacturing Establishments                                                              but four have at least ten percent fewer
                   per 1,000 Population,                                                                firms per capita now than in 1997.
           Change from 1997 to 2002 (1997=100)                                                          Louisville is one of the four, but it has
             Charlotte, NC-SC                              78.5
                                                                                                        still seen a drop of eight percent in
              Jacksonville, FL                               80.5
                                                                                                        manufacturing firms per capita.
Greensboro-Winston-Salem, NC                                    82.1

        Memphis, TN-MS-AR                                         83.4
               Lexington, KY
                Nashville, TN                                      85.1
                                                                                                        EMPLOYMENT         PER
             Birmingham, AL                                        85.3                                 ESTABLISHMENT AND
          Raleigh-Durham, NC                                       85.3
                                                                                                        EMPLOYMENT PER
              Indianapolis, IN                                       86.6

               Richmond, VA                                            87.8                             ESTABLISHMENT CHANGE              97-02
         Kansas City, MO-KS                                              88.7

               Columbus, OH                                               89.9                                All but three of the sixteen peer
               Omaha, NE-IA                                                 90.8                        metros have above average firm size, as
        Cincinnati, OH-KY-IN                                                91.1                        indicated by the number of employees
            Louisville, KY-IN                                               91.9                        per manufacturing establishment.
       Dayton-Springfield, OH                                                      95.7                 Lexington, with 76 employees per
                United States                                                              101.7        establishment, has far and away the
                                 50    60        70        80          90            100       110      largest average firm size, indicating that
                                                                                                        its regional economy is much more
                                                                                                        heavily weighted towards large firms
                                                                                                        than the nation as a whole. Louisville
                                                                                                        has the third highest average firm size
                    Manufacturing Employees                                                             among the peer metros, with about 56
                    per Establishment, 2002                                                             employees per manufacturing establish-
              Jacksonville, FL                             36.05
                                                                                                              The number of employees per
             Birmingham, AL                                 38.83

                                                                                                        establishment has been dropping for all
         Kansas City, MO-KS
        Memphis, TN-MS-AR                                       42.44
                                                                                                        but two of the peer metros, Jackson-
               Omaha, NE-IA                                        45.67                                ville and Columbus. However, none of
               Richmond, VA                                         46.70                               the peer metros has experienced a
        Cincinnati, OH-KY-IN                                        47.10                               decrease in average firm size as great as
             Charlotte, NC-SC                                       47.63                               the nation as a whole. Average firm
       Dayton-Springfield, OH                                        48.39                              size in Louisville has decreased just
               Columbus, OH                                            49.75                            over eight percent since 1997, putting it
              Indianapolis, IN                                           50.43                          right in the middle of the pack.
                Nashville, TN                                            51.20

          Raleigh-Durham, NC                                             51.23

            Louisville, KY-IN                                                55.71

Greensboro-Winston-Salem, NC                                                     58.48

               Lexington, KY                                                                   76.00

                United States                                   41.97

                                 0    10    20        30   40       50          60        70       80
                                      Number of employees per establishment

     Manufacturing in Louisville and Its Peer Metropolitan Areas: Results from the 2002 Economic Census                                              7
                                            Manufacturing Employees
                                   per Establishment, Change from 1997 to 2002
                                       Raleigh-Durham, NC                                    80.8

                                     Memphis, TN-MS-AR                                          84.3

                                    Dayton-Springfield, OH                                      85.6

                                            Richmond, VA                                        85.6

                                          Charlotte, NC-SC                                      86.1

                                     Cincinnati, OH-KY-IN                                          90.2

                                          Birmingham, AL                                            90.6

                                         Louisville, KY-IN                                          91.7

                                      Kansas City, MO-KS                                            92.5

                                            Omaha, NE-IA                                             93.2

                                             Nashville, TN                                           93.5

                             Greensboro-Winston-Salem, NC                                              94.0

                                            Lexington, KY                                              94.2

                                           Indianapolis, IN                                            95.6

                                           Jacksonville, FL                                                101.1

                                            Columbus, OH                                                   101.5

                                             United States                                  79.2

                                                              0     20     40      60      80          100         120
                                                                  Number of employees per establishment

    JOB   DISTRIBUTION AND JOB DISTRIBUTION CHANGES                                                97-02
         The following table describes the distribution of jobs among the 21 manufacturing subsectors
    for each of the 16 peer metros. In those cases where employment data was not disclosed by the
    Census Bureau due to privacy requirements we have estimated the number of jobs based upon the
    published range for the particular sector and the typical number of unknown jobs for those
    metros with no undisclosed data. About 11 percent of the metro-subsector combinations had
    undisclosed data.
        There is quite a bit of variation in the makeup of the manufacturing sector across the peer
    metros. Louisville, for example, has its largest concentration of jobs in the transportation equip-
    ment subsector (nearly 21 percent of jobs, the fourth highest percentage, trailing only Lexington,
    Dayton, and Indianapolis), while Greensboro, Raleigh-Durham, Omaha, Memphis, and Rich-
    mond all have three percent or less of their manufacturing jobs in that subsector.
         Greensboro and Raleigh-Durham are the most unique of the peer metros. While most of the
    peers have fewer than two percent of their manufacturing jobs in the textile mills and apparel
    manufacturing subsectors Greensboro has about 14 and seven percent of jobs in those sectors,
    respectively. Additionally, Greensboro’s highest concentration of jobs is in the furniture and
    related products subsector (nearly 18 percent), reflecting the influence of the High Point furniture
    market. The highest concentration of jobs for the Raleigh-Durham metro area is in the computer
    and electronic products subsector. Almost 31 percent of manufacturing jobs in the Raleigh-

8         Manufacturing in Louisville and Its Peer Metropolitan Areas: Results from the 2002 Economic Census
                          Job Distribution by Industry for Louisville and its Competitor Peer Metropolitan Areas
                                                                                                Dayton-      Greensboro-
                                                   Birmingham, Charlotte, Cincinnati, Columbus, Springfield, Winston-    Indianapolis, Jacksonville,
Industry                                           AL           NC-SC     OH-KY-IN OH           OH           Salem, NC IN              FL
Food mfg                                                  15.2%     10.0%        9.9%      8.0%         3.7%        3.1%         5.9%         12.6%
Beverage & tobacco product mfg                             1.4%      3.4%        1.5%      3.1%         0.0%        4.7%         0.7%          8.5%
Textile mills                                              1.4%     13.3%        0.3%      0.0%         0.0%       13.8%         0.0%          0.0%
Textile product mills                                      0.0%      0.7%        1.2%      0.5%         0.5%        2.7%         0.3%          0.9%
Apparel mfg                                                0.0%      2.4%        0.0%      0.5%         0.0%        7.3%         0.9%          2.0%
Leather & allied product mfg                               0.0%      0.0%        0.0%      0.0%         0.0%        0.0%         0.0%          0.0%
Wood product mfg                                           4.0%      3.1%        1.1%      1.7%         1.1%        3.4%         2.4%          2.3%
Paper mfg                                                  1.1%      4.0%        6.6%      1.8%         2.3%        4.4%         2.3%          8.3%
Printing & related support activities                      5.7%      3.8%        7.2%      5.5%         5.0%        4.4%         5.2%          6.0%
Petroleum & coal products mfg                              1.4%      0.0%        0.9%      0.0%         0.0%        0.0%         0.0%          0.9%
Chemical mfg                                               2.1%      7.0%        6.8%      6.4%         1.5%        4.9%         6.8%          3.1%
Plastics & rubber products mfg                             3.1%      8.2%        7.2%      9.1%       10.6%         5.5%         6.0%          3.0%
Nonmetallic mineral product mfg                            6.7%      3.4%        2.3%      9.2%         1.7%        2.3%         4.3%          6.2%
Primary metal mfg                                         19.4%      2.2%        4.7%      2.8%         2.5%        0.8%         4.2%          3.4%
Fabricated metal product mfg                              14.7%      8.3%       13.8%     11.2%       14.8%         6.7%        12.7%         10.1%
Machinery mfg                                              6.2%      7.4%       11.4%      6.8%       15.4%         4.3%         9.6%          4.2%
Computer & electronic product mfg                          0.7%      5.2%        2.7%      6.2%         5.4%        3.3%         4.1%          2.1%
Electrical equipment, appliance, & component mfg           2.4%      2.1%        3.1%      3.3%         2.7%        4.1%         0.7%          1.6%
Transportation equipment mfg                               4.9%      9.4%       13.3%     17.8%       27.6%         3.0%        26.6%          7.8%
Furniture & related product mfg                            4.7%      3.1%        1.6%      2.0%         1.3%       17.4%         1.5%          3.8%
Miscellaneous mfg                                          3.4%      2.8%        4.1%      4.0%         2.5%        2.9%         4.1%         13.1%
Unknown                                                    1.7%      0.2%        0.3%      0.2%         1.6%        0.9%         1.5%          0.2%

                                                   Kansas City,   Lexington, Louisville,    Memphis, Nashville,     Omaha, NE- Raleigh-   Richmond,
Industry                                           MO-KS          KY         KY-IN          TN-MS-AR TN             IA         Durham, NC VA
Food mfg                                                   9.4%         1.8%         8.9%       11.3%        7.2%        35.8%       8.2%        8.5%
Beverage & tobacco product mfg                             0.9%         1.4%         2.0%        2.4%        0.9%         0.0%       0.9%       14.1%
Textile mills                                              0.0%         0.0%         0.0%        0.0%        2.2%         0.0%       4.9%        3.0%
Textile product mills                                      0.3%         0.0%         0.9%        1.9%        1.5%         0.0%       2.5%        0.7%
Apparel mfg                                                0.9%         0.0%         0.0%        1.2%        0.7%         0.0%       1.7%        0.8%
Leather & allied product mfg                               0.0%         0.0%         0.0%        0.0%        0.7%         0.0%       0.0%        0.0%
Wood product mfg                                           0.9%         0.7%         2.1%        3.2%        3.1%         1.4%       4.8%        4.4%
Paper mfg                                                  5.8%         2.7%         4.8%        5.5%        2.8%         2.8%       1.2%       10.4%
Printing & related support activities                     11.1%         5.3%         7.7%       12.8%        7.7%         8.4%       4.8%        7.5%
Petroleum & coal products mfg                              0.4%         0.0%         0.0%        1.2%        0.0%         0.0%       0.0%        0.0%
Chemical mfg                                               8.4%         1.4%         6.5%       10.3%        2.4%         3.1%      10.5%       10.8%
Plastics & rubber products mfg                             6.2%         4.8%         6.3%        5.7%        7.5%         5.2%       3.1%        8.6%
Nonmetallic mineral product mfg                            3.7%         5.7%         2.5%        3.4%        3.6%         4.0%       3.0%        2.8%
Primary metal mfg                                          0.9%         0.0%         1.9%        2.3%        3.1%         2.2%       0.5%        3.7%
Fabricated metal product mfg                              10.1%         9.3%        12.4%       11.2%        9.0%         4.9%       5.4%        5.9%
Machinery mfg                                             11.1%        10.1%         7.2%        9.4%        5.7%         8.9%       5.9%        4.6%
Computer & electronic product mfg                          6.1%         8.3%         1.6%        0.0%        6.5%         4.9%      30.7%        3.0%
Electrical equipment, appliance, & component mfg           2.2%         9.4%         4.5%        3.9%        7.6%         3.7%       4.2%        1.2%
Transportation equipment mfg                              13.5%        32.9%        20.9%        1.7%       19.9%         1.9%       2.5%        1.0%
Furniture & related product mfg                            3.2%         0.7%         5.0%        3.1%        4.1%         5.8%       2.0%        4.1%
Miscellaneous mfg                                          4.3%         3.5%         2.8%        8.8%        3.6%         4.6%       2.7%        4.4%
Unknown                                                    0.7%         1.9%         1.9%        0.8%        0.2%         2.5%       0.7%        0.5%

Durham metro are in this sector. By comparison, the average among the other 15 peers is just four
percent, with Lexington having the next highest concentration of jobs in the computer and elec-
tronic products subsector at just over eight percent.
     The metros with the most unevenly distributed regional economies as measured by the
variance among the distribution of jobs between the subsectors are Omaha, Lexington, Dayton,
and Raleigh-Durham. Nearly 36 percent of Omaha’s manufacturing jobs are in the food
subsector, the highest concentration for any subsector of any of the peer metro areas. Lexington
has about 33 percent of its manufacturing jobs in the transportation equipment subsector, and
Dayton has nearly 28 percent of it manufacturing jobs in that same subsector.

           Manufacturing in Louisville and Its Peer Metropolitan Areas: Results from the 2002 Economic Census                                         9
           In terms of the percentage of total
     manufacturing employment in the top                               Percent of Manufacturing Jobs
     four subsectors of each peer metro,                               in Top Four Subsectors, 2002
     Dayton is clearly the most “top
     heavy,” with just over 68 percent of its                      Charlotte, NC-SC                              40.9%

     manufacturing employment coming                                 Richmond, VA                                  43.9%

     from just four subsectors (transporta-                           Nashville, TN                                44.2%

     tion equipment, machinery, fabricated                          Jacksonville, FL                               44.3%

     metal products, and plastic and rubber           Greensboro-Winston-Salem, NC                                 45.1%

     products). Louisville is the seventh                     Memphis, TN-MS-AR                                     45.6%

     most concentrated by this measure,                        Kansas City, MO-KS                                   45.9%

     with about 50 percent of its manufac-                           Columbus, OH                                      47.2%

     turing jobs in the transportation equip-                 Cincinnati, OH-KY-IN
                                                                  Louisville, KY-IN                                     49.9%
     ment, fabricated metal products, food
                                                                Raleigh-Durham, NC                                         55.2%
     and printing and related support activi-
                                                                    Indianapolis, IN                                       55.8%
     ties subsectors. The most diversified
                                                                   Birmingham, AL                                           55.9%
     peer metro is Charlotte, with just 41
                                                                     Omaha, NE-IA                                               58.9%
     percent of manufacturing jobs in its top
                                                                     Lexington, KY                                                61.7%
     four subsectors (textile mills, food,
                                                             Dayton-Springfield, OH                                                     68.3%
     transportation equipment, and fabri-
     cated metal products).                                                            0%    10% 20% 30% 40% 50% 60% 70% 80%
                                                                                            Percent of Total Manufacturing Employment
           Dayton was even more heavily
     concentrated in 1997, with about 71
     percent of its total manufacturing
     employment in its top four sectors, but
     it has seen a loss of about 11,000 jobs in
                                                                    Percent of Manufacturing Jobs
     the transportation equipment
                                                                       in Top Four Subsectors,
     subsector. Interestingly, it seems as if
                                                                 Change from 1997 to 2002 (1997=100)
     much of that employment has shifted
     just a bit northeast to the neighboring                                                                             89.7
                                                                Raleigh-Durham, NC
     Columbus metro area, which has seen                           Charlotte, NC-SC                                      90.3
     an increase of more than 8,000 jobs in                          Richmond, VA                                          93.9
     that subsector since 1997.                       Greensboro-Winston-Salem, NC                                         94.5

           As an indicator of the trend in                            Nashville, TN                                        95.2

     industry concentration for each peer                    Dayton-Springfield, OH                                        96.5

     metro we looked at the change in the                           Indianapolis, IN                                        97.3

     percentage of manufacturing employ-                      Cincinnati, OH-KY-IN                                          97.4

     ment in the top four subsectors from                      Kansas City, MO-KS                                           98.1

     1997 to 2002. On this measure, six of                           Lexington, KY                                          98.7

     the 16 peer metros have trended to-                           Birmingham, AL                                              100.3

     wards greater concentration of jobs                             Omaha, NE-IA                                              100.6

     among the top four sectors, while ten                    Memphis, TN-MS-AR                                                 104.1

     have trended in the opposite direction,                        Jacksonville, FL
                                                                     Columbus, OH                                                  108.8
     towards greater diversification of their
                                                                  Louisville, KY-IN                                                    116.3
     remaining manufacturing jobs. Louis-
     ville is the metro with the biggest trend                                         0       20    40     60    80      100       120        140

10         Manufacturing in Louisville and Its Peer Metropolitan Areas: Results from the 2002 Economic Census
towards greater concentration of manufacturing jobs, while Raleigh-Durham and Charlotte have
been diversifying the greatest. In the latter two cases, this is largely due to huge job losses in the
previously dominant subsector (computer and electronic products and textile mills, respectively).
In Louisville’s case, it is due to an increase in employment in the transportation equipment and
fabricated metal products subsectors, some of which may be an artifact of the addition of Shelby
and Nelson counties in Kentucky and Washington County, IN, to the metro area definition.
      We examined the correlation of the distribution of jobs by manufacturing subsector between
Louisville and its peer metro areas as an indicator of how close in overall manufacturing industry
structure each peer metro is to Louisville. The peer metros that are closest geographically to
Louisville also turn out to be the closest to Louisville in terms of the distribution of manufactur-
ing sector jobs among the 21 subsectors. Kansas City is the exception, but it is also an older, more
traditional manufacturing town. Raleigh-Durham, Greensboro, and Richmond are the peer
metros least like Louisville. They are also the least like any other peer metro area in terms of the
average correlation over all the other peer metros. They are also unlike each other (the largest
correlation coefficient among the three being just 0.116).
      Interestingly, none of the peer metro areas are very much like any of the others in terms of
how the distribution of their manufacturing jobs has changed since 1997. But movement in oppo-
site directions can signal convergence from different starting points. In general Louisville has
moved closer to Charlotte, Columbus, and Lexington, and moved away from Omaha in terms of
the distribution of manufacturing jobs among the industry subsectors.

                                         Job Distribution by Industry:
                                     Correlation between Louisville and its
                                      Competitor Peer Metro Areas, 2002

                                   Raleigh-Durham, NC       0.013

                         Greensboro-Winston-Salem, NC           0.024

                                        Richmond, VA                    0.166

                                        Omaha, NE-IA                            0.313

                                      Birmingham, AL                              0.365

                                 Memphis, TN-MS-AR                                      0.455

                                       Jacksonville, FL                                   0.503

                                      Charlotte, NC-SC                                     0.530

                                        Lexington, KY                                                       0.833

                                  Kansas City, MO-KS                                                         0.862

                                        Columbus, OH                                                          0.881

                                Dayton-Springfield, OH                                                        0.883

                                 Cincinnati, OH-KY-IN                                                         0.885

                                         Nashville, TN                                                         0.911

                                       Indianapolis, IN                                                         0.930

                                                          0.0           0.2       0.4           0.6   0.8           1.0
                                                                 Correlation coefficient for jobs by industry

      Manufacturing in Louisville and Its Peer Metropolitan Areas: Results from the 2002 Economic Census                  11
                                                                        Manufacturing Workers
     WORKERS AND PERCENT                                           Percent Production Workers, 2002
     CHANGE     97-02                                          Raleigh-Durham, NC
                                                             Cincinnati, OH-KY-IN


                                                              Kansas City, MO-KS                                 68.7%
           Nationwide, just over 70 percent                        Jacksonville, FL                               69.0%
     of manufacturing employees are pro-                            Columbus, OH                                  70.0%
     duction workers. Ten of our 16 peer                     Memphis, TN-MS-AR                                    70.0%
     metro areas have a percentage of                              Indianapolis, IN                               70.8%

     production workers a bit higher than                           Richmond, VA                                   71.6%

     that, with Greensboro having the                             Birmingham, AL                                   71.9%

     highest percentage of production                               Lexington, KY                                  72.4%

     workers, a bit over 78 percent. Louis-                       Charlotte, NC-SC                                 72.6%

     ville has the second highest percentage                Dayton-Springfield, OH                                  72.7%

     of production workers at 76.3 percent.                         Omaha, NE-IA                                    73.8%

                                                                     Nashville, TN                                   75.6%
     Aside from Nashville, which has one
                                                                 Louisville, KY-IN                                    76.3%
     of the most diversified manufacturing
                                                     Greensboro-Winston-Salem, NC                                        78.1%
     sectors, the percent of production
                                                                     United States                                70.3%
     workers correlates fairly well with our
                                                                                     25%           50%            75%                   100%
     measures of industry concentration.
                                                                                                Percent production workers
     The implication is that concentration
     in the subsectors is due to extensive
     production facilities.
           The clear outlier is Raleigh-
     Durham in which only 56 percent of                              Manufacturing Workers
     manufacturing workers are production                          Percent Production Workers,
     workers. Nearly 31 percent of the                          Change from 1997 to 2002 (1997=100)
     manufacturing jobs in Raleigh-Durham
     are in the computer and electronic                           Charlotte, NC-SC                                           96.4

     products subsector, which has just 23                          Columbus, OH                                             96.5

     percent production workers among its                          Jacksonville, FL                                          96.6

                                                                   Indianapolis, IN                                          97.3
     employees. Nationally, the computer
                                                                    Omaha, NE-IA                                             97.4
     and electronic products subsector has
                                                                 Louisville, KY-IN                                            98.0
     47 percent production workers. Em-
                                                            Dayton-Springfield, OH                                            98.4
     ployment in that subsector in Raleigh-                                                                                   98.5
                                                                  Birmingham, AL
     Durham appears to be heavily                    Greensboro-Winston-Salem, NC                                              98.7
     weighted towards research and design                     Kansas City, MO-KS                                               98.7
     jobs. In comparison, all of the other                           Nashville, TN                                               99.3
     peer metros, with the exception of                      Memphis, TN-MS-AR                                                    100.4
     Birmingham (but only 311 jobs), have                           Richmond, VA                                                    101.1
     a percentage of production workers in                   Cincinnati, OH-KY-IN                                                   101.7

     this subsector above the national                         Raleigh-Durham, NC                                                   102.2

     average. Nearly 75 percent of                                  Lexington, KY                                                    102.8

                                                                     United States                                            97.9

                                                                                      50   60       70      80      90       100          110

12         Manufacturing in Louisville and Its Peer Metropolitan Areas: Results from the 2002 Economic Census
Greensboro’s employment in the computer and electronic products subsector consists of produc-
tion workers. For Louisville the percentage is 55 percent.
     There has not been much movement in terms of the change in the percentage of production
workers from 1997 to 2002. The two metros that lost the most employment in the computer and
electronic products subsector also saw the most positive change as the mix of jobs shifted away
from that low production worker subsector to other types of manufacturing. Louisville mirrored
the national trend almost exactly.

      As can be easily seen in the charts Louisville provides a puzzling case in terms of value added.
It is the only metro area that saw a drop in value added per employee from 1997 to 2002. The fact
that the value added per employee dropped by almost half and that Louisville went from having
the second highest value added per employee among the peer metros in 1997 to having the second
lowest in 2002 is baffling. Looking at the breakdown of value added statistics by manufacturing
subsector for 1997 and 2002 does not provide any easy answers to the situation.
      The table makes clear that the issue is the vast difference in value added reported for 1997
versus 2002. The difference between the total for all the disclosed data and the entire manufactur-
ing sector for 2002 is small and entirely accounted for by our estimates of the undisclosed data
                                                                                 (based upon disclosed data for the
                                                                                 other peer metros for those
                                                                                 subsectors). However, this is not the
                       Manufacturing Value Added                                 case for 1997, where the difference is
                       per Employee ($1,000), 2002                               very large (less than half of the total is
                                                                                 disclosed) and after our estimates we
                Birmingham, AL           $97.01
                                                                                 are still left with a gap of $3.6 billion
               Louisville, KY-IN           $110.69
                                                                                 (even using the high end of our esti-
                   Omaha, NE-IA
                   Nashville, TN             $127.52
                                                                                 mate ranges). It is entirely possible that
           Cincinnati, OH-KY-IN                $136.99                           the puzzle is due to a recording error
           Memphis, TN-MS-AR                    $142.22                          and that the true value added figure for
                 Jacksonville, FL               $144.93                          1997 is $11.27 billion and not $17.27
  Greensboro-Winston-Salem, NC                   $153.65                         billion. In this case the difference
         Dayton-Springfield, OH                   $158.33                        between 1997 and 2002 would be
                 Indianapolis, IN                   $174.29                      accounted for by the closing of the
                  Columbus, OH                      $175.11                      Phillip Morris plant. Making this
               Charlotte, NC-SC                     $176.86                      substitution Louisville would only
            Kansas City, MO-KS                      $178.70
                                                                                 have had the fifth highest value added
                   Lexington, KY                     $185.22
                                                                                 per job among the peer metros in 1997
            Raleigh-Durham, NC
                                                                                 and would have been just above most
                  Richmond, VA                                         $337.81
                                                                                 of the rest. It would also mean that
                    United States             $128.21
                                                                                 Louisville’s value added per employee
                                  $0   $100         $200        $300        $400 was just 20 percent below 1997 levels
                                     Value added per employee ($1,000)
                                                                                 rather than 48 percent below.

       Manufacturing in Louisville and Its Peer Metropolitan Areas: Results from the 2002 Economic Census                     13
                                       Louisville MSA Manufacturing Value Added, 1997 and 2002
                                                        Value added,      Undisclosed data                  Value added,      Undisclosed data
     Manufacturing subsector                            1997 ($1,000) estimates, 1997 ($1,000)              2002 ($1,000) estimates, 2002 ($1,000)
     Food mfg                                              $926,087                                           $1,048,957
     Beverage & tobacco product mfg                       $3,281,830                                            $460,360
     Textile product mills                                         D            $30,000-40,000                         D                $30,000-40,000
     Apparel mfg                                                   D           $75,000-100,000                        $0
     Wood product mfg                                      $110,399                                                    D                          $100,000
     Paper mfg                                             $210,364                                             $505,640
     Printing & related support activities                  $439,170                                            $479,054
     Chemical mfg                                         $1,202,820                                          $1,035,979
     Plastics & rubber products mfg                         $302,780                                            $250,959
     Nonmetallic mineral product mfg                       $246,949                                             $219,909
     Primary metal mfg                                     $104,778                                             $173,526
     Fabricated metal product mfg                          $705,678                                             $991,250
     Machinery mfg                                         $514,720                                             $515,636
     Computer & electronic product mfg                             D          $150,000-200,000                  $170,814
     Electrical equipment, appliance, & component mfg              D       $500,000-1,000,000                          D              $300,000-400,000
     Transportation equipment mfg                                  D      $2,000,000-4,000,000                $2,007,376
     Furniture & related product mfg                       $177,166                                             $282,371
     Miscellaneous mfg                                     $108,031                                             $158,746

     Sum of all disclosed data, or estimates              $8,330,772                  $5,340,000              $8,300,577                          $540,000

     Total manufacturing sector                          $17,272,778                                          $8,794,261

            All but four of the peer metros (Birmingham, Louisville, Omaha, and Nashville) have more
       value added per employee than the national average. Richmond is the clear leader here, with a
       figure nearly 80 percent greater than second place Raleigh-Durham. Ten of the 16 peers have also
       had more positive change in the level
       of value added per employee than the
       national average. Value added per                        Manufacturing Value Added
       employee is more than 50 percent                           per Employee ($1,000),
       higher in Lexington now than it was in              Change from 1997 to 2002 (1997=100)
                                                                               Louisville, KY-IN                    51.9

                                                                                 Omaha, NE-IA                                     102.9

                                                                                Jacksonville, FL                                      109.7

       PAYROLL            PER EMPLOYEE AND                                 Cincinnati, OH-KY-IN                                        112.5

                                                                                Birmingham, AL                                         113.7
       PAYROLL PER EMPLOYEE                                                Kansas City, MO-KS                                           114.8

       CHANGE           97-02                                                   Indianapolis, IN                                          122.1

                                                                                  Nashville, TN                                               128.6

                                                                            Raleigh-Durham, NC                                                 130.0
            Ten of the 16 peer metros had
                                                                         Dayton-Springfield, OH                                                 133.3
       annual payrolls per employees greater
                                                                               Charlotte, NC-SC                                                 134.4
       than the national average of $39,050 in
                                                                  Greensboro-Winston-Salem, NC                                                  136.0
       2002. Tops was Lexington with an                                                                                                         136.1
                                                                          Memphis, TN-MS-AR
       average payroll of $46,050 per em-                                        Columbus, OH                                                     140.1
       ployee. Indianapolis had the second                                       Richmond, VA                                                          147.5
       highest average payroll. Louisville, at                                   Lexington, KY                                                          154.0
       $40,910 had the ninth highest payroll                                      United States                                         118.0
       per employee among the peer metros.                                                         0   20      40   60     80   100    120      140     160

14              Manufacturing in Louisville and Its Peer Metropolitan Areas: Results from the 2002 Economic Census
                                                                                                Greensboro, with an average payroll
                   Manufacturing Total Payroll                                                  of $32,660 per employee, was by far
                   per Employee ($1,000), 2002                                                  the lowest paying metro. Omaha,
                                                                                                Charlotte, and Birmingham were also
Greensboro-Winston-Salem, NC                          $32.66
                                                                                                well below the national average.
               Omaha, NE-IA                                $35.20

             Charlotte, NC-SC                               $35.43                                    Nine of the peer metros saw their
             Birmingham, AL                                  $36.11                             total payrolls per employee rise faster
                Nashville, TN                                  $37.29                           than the national average from 1997 to
        Memphis, TN-MS-AR                                      $37.64                           2002. The clear leader was Raleigh-
              Jacksonville, FL                                       $39.73                     Durham which experienced a 36
            Louisville, KY-IN                                             $40.91                percent increase in payroll per em-
       Dayton-Springfield, OH                                              $41.08
                                                                                                ployee. Louisville experienced an
               Columbus, OH                                                $41.25
                                                                                                increase right around the national
          Raleigh-Durham, NC
                                                                                                average. Dayton, which lost a lot of
         Kansas City, MO-KS                                                  $42.53
                                                                                                jobs in the transportation equipment
        Cincinnati, OH-KY-IN                                                 $42.56
                                                                                                subsector, was the only peer metro
               Richmond, VA                                                  $42.75
                                                                                                that did not manage an increase in
              Indianapolis, IN
                                                                                                payroll per employee that was at least
               Lexington, KY
                United States                                       $39.05
                                                                                                close to the national average.
                                 $20           $30                  $40                  $50
                                        Total payroll per employee ($1,000)

                                                                                                PRODUCTION        WORKER WAGES
                                                                                                PER HOUR AND PRODUCTION
                                                                                                WORKER WAGES PER HOUR
                Manufacturing Total Payroll
                  per Employee ($1,000),
                                                                                                CHANGE     97-02
            Change from 1997 to 2002 (1997=100)
                                                                                                     Nine of the 16 peer metros had
       Dayton-Springfield, OH                              104.3
                                                                                                average production worker wages per
               Richmond, VA                                    110.3                            hour higher than the national average
               Omaha, NE-IA                                    111.2                            of $16.38 in 2002. Lexington and
              Indianapolis, IN                                     111.9                        Indianapolis had the most well paid
        Cincinnati, OH-KY-IN                                       112.1                        production workers at more than 20
                Nashville, TN                                      113.0                        dollars per hour. Louisville was fourth,
            Louisville, KY-IN                                        114.9                      with an average wage rate of $18.51.
Greensboro-Winston-Salem, NC                                         115.7

               Columbus, OH                                           116.2
                                                                                                     The bulk of Lexington’s manu-
             Charlotte, NC-SC                                         116.9                     facturing jobs are in relatively high
             Birmingham, AL                                           117.2                     paying subsectors such as transporta-
        Memphis, TN-MS-AR                                             117.3                     tion equipment, machinery, fabricated
              Jacksonville, FL                                             120.3                metal products, and electrical equip-
         Kansas City, MO-KS                                                 121.7               ment, appliances, and components.
               Lexington, KY                                                 122.0              The bulk of manufacturing jobs in
          Raleigh-Durham, NC                                                            136.0   Indianapolis are in the first three of
                United States                                        115.2                      those subsectors plus chemicals and
                                 70    80    90      100    110       120       130      140    plastic and rubber products. The

     Manufacturing in Louisville and Its Peer Metropolitan Areas: Results from the 2002 Economic Census                                    15
     variation in production worker pay
     among industries is illustrated well by                       Manufacturing Production Worker
     examining the Raleigh-Durham area.                                Wages per Hour, 2002
     Despite having a total payroll per
     employee well above the national                Greensboro-Winston-Salem, NC                      $14.50

     average, and sixth among the peer                              Omaha, NE-IA                         $15.13

                                                               Raleigh-Durham, NC                        $15.19
     metros, its production worker pay per
                                                                  Charlotte, NC-SC                       $15.31
     hour is well below the national aver-
                                                                  Birmingham, AL                          $15.62
     age and third worst among the peer
                                                             Memphis, TN-MS-AR                             $15.73
     metro areas. While about 31 percent of                                                                $15.77
                                                                   Jacksonville, FL
     all manufacturing jobs in Raleigh-                                                                         $16.58
                                                                     Nashville, TN
     Durham are in the computer and                          Cincinnati, OH-KY-IN                                    $17.91
     electronic products subsector, only                            Richmond, VA                                     $18.07
     about 12 percent of the production                       Kansas City, MO-KS                                         $18.32
     workers are in this sector, and the six                        Columbus, OH                                         $18.45
     sectors that have the great majority of                     Louisville, KY-IN                                       $18.51
     production workers in Lexington and                    Dayton-Springfield, OH                                       $18.54

     Indianapolis have just 35 percent of                          Indianapolis, IN                                               $20.37

     such workers in the Raleigh-Durham                             Lexington, KY                                                  $20.61

     metro area.                                                     United States                              $16.38

                                                                                      $10          $15                      $20                  $25
           As with overall payroll, Louis-
                                                                                             Production worker wages per hour
     ville experienced an increase in pro-
     duction worker wages right around
     the national average. Most of the peer
     metros experienced a wage increase
     close to the national average, with                          Manufacturing Production Worker
     Louisville having the eighth highest                                  Wages per Hour,
     rate of increase. Lexington was the                         Change from 1997 to 2002 (1997=100)
     clear winner, having experienced a
     greater than 37 percent rise in produc-                Dayton-Springfield, OH                                       109.0

     tion worker wages per hour, much                               Omaha, NE-IA                                         109.2

     higher than any other peer metro.                              Richmond, VA                                         109.5

     Only three of the peers experienced                           Jacksonville, FL                                         114.2

     much less production worker wage                                Nashville, TN                                           114.4

     growth than the national average.                       Cincinnati, OH-KY-IN                                            114.7

     Dayton, Omaha, and Richmond had                 Greensboro-Winston-Salem, NC                                                116.4

                                                                   Indianapolis, IN                                              116.4
     only about half as much growth as the
                                                                 Louisville, KY-IN                                                117.6
     nation as a whole.
                                                              Kansas City, MO-KS                                                  117.6

                                                             Memphis, TN-MS-AR                                                     119.7

                                                                    Columbus, OH                                                   120.1

                                                               Raleigh-Durham, NC                                                   120.3

                                                                  Charlotte, NC-SC                                                     122.0

                                                                  Birmingham, AL                                                         124.1

                                                                    Lexington, KY                                                                137.3

                                                                     United States                                               117.1

                                                                                      70    80    90       100      110          120       130   140

16         Manufacturing in Louisville and Its Peer Metropolitan Areas: Results from the 2002 Economic Census
PER ESTABLISHMENT CHANGE                                 97-02
      Capital expenditures in any one year are a very imprecise measure of the ongoing improve-
ment (or lack thereof) of manufacturing facilities and other capital equipment since these are
expenditures that are meant to last for years and not repeated each year. But these two charts can
at least give us a snapshot of what was happening in the census year and how that differed from
the previous census year.
     Ten of the 16 peer metros had levels of capital expenditures in 2002 that were significantly
above the national average per establishment. Nashville, Lexington, and Raleigh-Durham all had
levels of capital expenditures at least 75 percent greater than the US average. About two-thirds of
the capital expenditures in Nashville were in the transportation equipment subsector. Lexington
also had a high level of capital expenditures in that subsector. Over 60 percent of the capital
expenditures in Raleigh-Durham came in the chemical and computer and electronic products
subsectors. Only Jacksonville and Kansas City had capital expenditures much below the national
     Louisville was just twelfth in capital expenditures per establishment among the peer metros
but still had a level above the national average. Capital expenditures in Louisville were spread
among all the subsectors, but the transportation equipment and chemical subsectors did account
for about 35 percent of such spending in Louisville during 2002.
      Nationwide, capital expenditures per establishment were down nearly 25 percent in 2002
from 1997. Thirteen of the peer metros did better than that, and seven had higher levels of capital
                                                                   expenditures per establishment in 2002
                                                                   than they had in 1997. Per establish-
                  Manufacturing Capital Expenditures               ment, Birmingham had 89 percent
                         per Establishment ($1,000),               more capital spending than in 1997.
                 Change from 1997 to 2002 (1997=100)               Louisville, Richmond, and Lexington
                                                                   were the only metros that did worse
                   Lexington, KY       38.7
                                                                   than the national average in terms of
                  Richmond, VA          44.3
                                                                   the change from 1997 to 2002 in
               Louisville, KY-IN             62.0
                                                                   capital expenditures per establishment.
               Charlotte, NC-SC
                 Jacksonville, FL                  84.7
                                                                   The fact that Lexington had the
         Dayton-Springfield, OH                    84.8            second highest level of capital expendi-
            Kansas City, MO-KS                      88.9           tures per establishment in 2002 (80
  Greensboro-Winston-Salem, NC                       90.8          percent higher than the US average)
                 Indianapolis, IN                      99.0        but the lowest change from 1997
                   Nashville, TN                         105.8     means that Lexington’s level of
           Cincinnati, OH-KY-IN                          106.3     capital expenditures per establishment
                   Omaha, NE-IA                            114.4   in 1997 was about three and a half
          Memphis, TN-MS-AR                                 118.0
                                                                   times greater than the national aver-
                  Columbus, OH
         Raleigh-Durham, NC                                      147.3

            Birmingham, AL                                               189.1        In general, because most of the
               United States                      75.6                           peer metros were both above the
                               0   20   40   60   80 100 120 140 160 180 200     national average for capital expendi-

      Manufacturing in Louisville and Its Peer Metropolitan Areas: Results from the 2002 Economic Census                 17
     tures per establishment and experi-
     enced much greater change from 1997                            Manufacturing Capital Expenditures
     to 2002 they were as a group much                               per Establishment ($1,000), 2002
     closer to the national average in 1997
                                                                   Jacksonville, FL         $282.59
     in terms of capital expenditures per                                                     $313.80
                                                              Kansas City, MO-KS
     establishment.                                         Dayton-Springfield, OH                $352.86

                                                                  Charlotte, NC-SC                $353.61

                                                                 Louisville, KY-IN                    $377.64

                                                     Greensboro-Winston-Salem, NC                      $400.14

                                                                  Birmingham, AL                                $472.57

                                                                    Richmond, VA                                $478.07

                                                                   Indianapolis, IN                             $478.76

                                                                    Omaha, NE-IA                                 $486.91

                                                             Memphis, TN-MS-AR                                     $516.17

                                                                    Columbus, OH                                      $555.22

                                                             Cincinnati, OH-KY-IN                                          $588.49

                                                               Raleigh-Durham, NC                                                $637.27

                                                                    Lexington, KY                                                 $652.95

                                                                     Nashville, TN                                                   $690.59

                                                                     United States                $361.34

                                                                                  $200            $400                    $600              $800
                                                                                      Capital expenditures per establishment ($1,000)

18         Manufacturing in Louisville and Its Peer Metropolitan Areas: Results from the 2002 Economic Census

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