The economic health of 27 U.S. states showed signs of improvement as a four-year high in industrial production spurred gains in the so-called Rust Belt region, where manufacturing accounts for a larger share of jobs.
Michigan, Ohio, Indiana and Illinois, contiguous Midwestern states that are home to 13 percent of Americans, posted four of the eight biggest gains for the three months ending in September, compared to the previous quarter, according to the Bloomberg Economic Evaluation of States Index.
“We’re seeing the resurgence of U.S. manufacturing,” said Robert Dye, chief economist at Comerica Inc. (CMA) in Dallas. “It’s a potential bright spot and it’s one of the good news stories that’s still out there for the U.S. economy.”
The 13 percent average share of manufacturing employment in the four states compares with the 8.9 percent level for the U.S. as a whole. The Federal Reserve’s gauge of industrial production at factories, mines and utilities rose in July to 97.9, the most since June 2008, seven months into the longest and deepest U.S. recession since the Great Depression. The pace of auto sales jumped to a four-year high in September.
The BEES Index is based on the performance of local-company shares, tax collections, home prices, mortgage delinquencies, job growth and personal income, giving equal weight to each component. It is intended to indicate the direction of each economy, rather than absolute health, so a state that’s quickly rebounding will receive a higher rank than one with a steady but slower pace of growth.
Automakers sold cars and light trucks in the U.S. at an annualized rate of 14.9 million, after seasonal adjustments, in September, according to Autodata Corp. That pace, at the time the highest since March 2008, was topped by November’s 15.5 million rate. Researcher LMC Automotive raised its 2012 North American production estimate to 15.3 million, from 15 million, citing strong demand in the first three quarters.
Automakers including Ford Motor Co. (F) and Chrysler Group LLC are hiring workers and adding shifts in Midwest plants. Ford has said it’s expanding annual production capacity by 400,000 units this year, which includes additional crews in two factories in Michigan and Illinois. Chrysler completed the addition of 1,800 workers in Belvidere, Illinois, where it builds the new Dodge Dart compact.
Jeff Kearns and Ilan Kolet, Bloomberg.