Once, Alabama was known strictly for it's agriculture. The Cotton State they called it -- and still do. But sometime around the Civil War something changed. That state discovered manufacturing.
It's true: Agriculture is still big business in Alabama. In the last decade alone, agriculture has contributed more than $70 billion annually to Alabama’s GDP. So it’s no surprise that this much older, more culturally entrenched industry is leading a younger market like manufacturing. But what is surprising is the pace at which manufacturing is catching up to agriculture in terms of influence in Alabama’s economy.
Manufacturing is the 4th largest contributor to Alabama’s GDP year-over-year. And it’s steadily growing, accounting for more than 17% of the state’s economic output in 2014.
In other words: That’s a growth rate higher than the national average of 12%. And it crowns Alabama’s durable goods manufacturing sector the second largest contributor to real GDP growth in the state’s economy.
Last year alone, OEMs and suppliers of custom manufactured parts accounted for $33 billion.
With industry heavyweights like Mercedes-Benz, Toyota Motor Company, Safran, and United States Steel Corporation calling the Cotton State home, it’s no wonder that manufacturing is yielding impressive results.
In a recent interview with Alabama News Center, Mobile Alabama Chamber of Commerce President and CEO Bill Sisson said, “Mobile has seen a 33 percent increase in manufacturing jobs in the past five years – compared with only about 8 percent nationally – alongside total wage increases of about 18 percent.”
That’s because manufacturing is gaining mind-share. In recent years, investment in manufacturing has noticeably steamed full ahead, especially in southern Alabama, where manufacturing accounts for almost 30% of the overall economy in many counties.
A similar scenario can be found 44 miles east of Birmingham, in Lincoln, Alabama. There, in a town of less than 10,000 people, Japanese automaker Honda, along with its incumbent Tier-1 supplier base – 27 of which are native to Alabama -- has generated 43,000 jobs.
The Lincoln plant alone has generated almost 4.5% of Alabama’s total GDP each year since 2013.
But automotive manufacturing wasn’t always big business in Alabama: The state’s first automotive manufacturing plant wasn’t built until 1993 …
HOW DIRECT MATERIALS GAVE BIRTH TO ALBAMA'S MANUFACTURING INDUSTRY
Once called the "Pittsburgh of the South", Birmingham has been a mecca for materials manufacturing since the 19th Century. With an abundance of coal, limestone, and iron, the city drew thousands to its thriving steel fabrication industry after the Civil War, and spawned a movement that would ultimately reshape the state.
For almost a hundred years, materials manufacturers ruled the Alabama manufacturing market.
By the 1920s, Birmingham produced one fourth of the nation's foundry iron and had grown into the largest steel maker in the Southeast. -- Encyclopedia of Alabama
It wasn’t until the space race of the 1960s that other manufacturing subsectors began to gain a foothold in the region: plastics & rubber manufacturing, as well as aerospace manufacturing and chemical manufacturing, were three major players that spawned from the necessity to fuel The George C. Marshall Flight Center, where the Saturn V Rocket was born.
Still home to hundreds of machine shops and metal fabricators, modern Alabama finds itself at a crossroads – with many of its most successful shops and companies leading the charge to the future.
Today, United States Steel and American Cast Iron Pipe Company are two of Alabama’s oldest materials manufacturers still operating out of the state, providing direct materials to the automotive, oil & gas, and energy sectors. And although Alabama direct materials manufacturers aren’t as prevalent as they once were, they’re still highly influential and crucially necessary for not only the local economy, but also the world.
According to Made In Alabama, “Figures from the U.S. Department of Commerce show that Alabama exports totaled $19.37 billion last year , just below the all-time record of $19.58 billion set in 2012.” Direct materials had a lot to do with that.
ALABAMA’S GROWING MANUFACTURING FOOTPRINT
Looking forward, fabricated metal products looks to fill at least part of the void left by Alabama’s influential, but contracting pool of direct materials manufacturers. A simple search of the MFG.com manufacturers directory returns more than 100 fabricated metal products manufacturers in Alabama alone, specializing in bending, cutting, forming, machining, and assembly.
What’s more, with an increased emphasis on additive manufacturing and rapid prototyping, advanced manufacturing disciplines will undoubtedly fill the rest.
For instance, Hunstville-based manufacturer Dynetics was just named as a key team member in the development and manufacture of the AR1 engine, which is set to replace the Russian RD-180 engine on the Atlas V rocket.
And General Electric is already manufacturing mass quantities of crucial 3D printed fuel nozzles to be used on their state-of-the-art LEAP jet engine at their Auburn, Alabama plant.
By blending both the past and future of their manufacturing heritage, Alabamians are making a strong argument for manufacturing in their state.
On a steady uptrend over the past 6 years, many expect that Alabama's manufacturing output will increase in 2016. A recent report showed that Alabama’s manufacturers were optimistic through the first quarter of 2016, confident of continued growth through the remainder of the year. Many cited 2015’s above-average output of motor vehicle and transportation parts, as well as fabricated metal products and computer and electronic products as a primary reason.
As Alabama’s economy becomes more and more reliant on manufacturing and the subsectors that support it, opportunities and options for buyers of custom manufactured parts will only increase, making Alabma a hotbed of manufacturing activity.
Oh, and Alabama still believes in agriculture: This Jackson County-based company is the first U.S. firm to manufacture in Cuba in more than 50 years.
Another example of the state’s resilient and adaptive past shaping its bright future.
This is Part 1 In A Series Examining America’s Top 10 Manufacturing States. Check back next week to see why California is not only the cradle of modern technology -- but also a manufacturing powerhouse.