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The Michigan Manufacturers Association was founded in 1902 to advocate on behalf of the state’s industrial community in order to build a better business climate. A century later, MMA’s mission has not wavered. The Association continues to represent our state’s important manufacturing sector.

Diversification

Michigan is known as the nation’s automotive capital — 23 percent of total U.S. vehicle production occurs here. More than 700 auto suppliers call Michigan home; that’s more than 50 percent of the North American auto supplier base.

But our state features a diverse array of manufacturing firms — both “traditional” manufacturers and advanced manufacturers. More than half of the $8.9 billion worth of office furniture systems made in the U.S. in 2004 were produced by Michigan companies. We rank fourth in the nation for plastics shipments and number of employees in the plastics industry.

Growth in our life sciences sector, including companies manufacturing pharmaceuticals and other medical therapies, exceeds the U.S. average, expanding 27 percent in employment, 32 percent in number of companies and 165 percent in sales. And Michigan companies are already playing a leading role in the development and production of homeland security equipment, such as improved body armor, concrete strengthening systems, portable tracking and communication systems and advanced detection systems. Our strong research and development and manufacturing capabilities make Michigan a natural leader in this emerging industry.

Despite predictions of the manufacturing industry’s decline in Michigan, established and emerging manufacturing companies are aggressively positioning themselves to be global leaders and proving they are “in the game” for the long term.

Economic contribution

Manufacturing contributes nearly $76.3 billion to the Michigan Gross State Product, far outranking other economic sectors, including real estate ($42.9 billion), professional and technical services ($29 billion), health care ($26.3 billion) and finance and insurance ($22 billion). Thus, manufacturing contributes substantially to our state’s ranking of number nine in the nation for economic output.

The manufacturing industry’s use of intermediate goods and services in production processes means that it generates substantial economic activity at the intermediate level. Manufacturing’s multiplier effect is stronger than other sectors. Every $1 of a manufacturing product sold generates an additional $1.43 of intermediate economic output. For comparison, the information sector generates only 80 cents, and the financial services sector only 50 cents, of intermediate activity for every $1 of final sales.

Employment

Michigan employs the fifth highest number of manufacturing workers in the U.S., more than 670,000 people. This represents 15 percent of Michigan’s non-farm employment.

Manufacturing payrolls total more than $32 billion, about 22 percent of the state’s total payroll, significantly more than the next highest sector, health care, with $18 billion in payroll.

Michigan manufacturers pay the highest wages to production workers in the nation, at more than $20 per hour. The average annual pay for all of Michigan’s manufacturing employees is $56,056. In addition to high pay, nearly all manufacturing companies provide health care benefits to their employees.

The state’s high-tech workforce, including those employed in the advanced manufacturing sector, numbers 568,168 workers, making Michigan the fourth largest high-tech employer in the nation.

Export impact

Michigan manufacturers helped our state to export $3,523 worth of goods for every person in Michigan in 2004. This is the sixth highest per capita export rate in the nation. More than $35.6 billion of goods were exported that year, the fourth highest export rate in the U.S. Michigan companies export to 191 markets worldwide.

Our state is the nation’s leader in vehicle and parts exports, at $14.8 billion, which accounts for 20.1 percent of all U.S. sales abroad in that category. We also are strong producers and exporters of machinery ($3.7 billion), chemicals ($3.1 billion), primary and fabricated metal products ($2.5 billion) and computers and electronic products ($1.5 billion).

Investments

Michigan ranks second in the nation for major corporate capital investments ($6.5 billion), much of which occurs in the auto manufacturing sector. Sixty-four percent of the $6.5 billion total investment emanated from Michigan-based firms. Our state attracted 45 percent of the total auto industry U.S. investment of $14.5 billion in 2004.

Recent Manufacturing Investments in Michigan

Tax support

Michigan’s manufacturing industry is the state’s largest single business tax (SBT) payer, accounting for 28 percent of the SBT base. Manufacturers also pay a significant proportion of the state’s total personal property taxes. Industrial property accounted for 38.6 percent of personal property taxable value in Michigan in 2003. Manufacturing employers are also taxed to support the unemployment insurance fund and are required to provide workers’ compensation insurance.

Knowledge production

Michigan ranked second in the nation for research and development spending, with more than $18 billion spent in 2002, the last year for which data are available. We are ranked first in the nation in industrial R&D intensity according to the National Science Foundation. More than 85 percent of the North American automotive R&D occurs in our state.

Manufacturers helped Michigan attract more than $112 million in venture capital investments from third quarter 2004 through the fourth quarter of 2005.

Community commitment

Small manufacturing companies are the backbone of Michigan’s communities and our state’s manufacturing industry. About 96 percent of manufacturing companies employ fewer than 500 employees and 68 percent employ fewer than 20 workers.

Michigan’s manufacturing industry contributes more than $1.5 billion annually toward educational, cultural, human services and other community-building efforts. Manufacturing leaders are also strong community leaders, investing their time and talents in local initiatives and activities. (See MMA Award Programs for information on past “Michigan Manufacturers of the Year,” industry leaders who demonstrate exemplary commitment to their communities.)

MMA Membership

The Michigan Manufacturers Association represents the interest and needs of nearly 3,000 company members throughout the state and in many different sectors.

MMA members by manufacturing sector

Sources: Michigan Economic Development Corporation Web site; U.S. Census Bureau Annual Survey of Manufacturers 2003; U.S. Census Bureau Web site; U.S. Department of Commerce, Bureau of Economic Analysis; 2006 Competitiveness Redbook – National Edition, NAM; The Facts About Modern Manufacturing, NAM; “State Data,” NAM Web site; Michigan Department of Labor and Economic Growth, Bureau of Labor Market Information; 2005 U.S. Investment Monitor, Ernst & Young LLP; Michigan Department of Treasury, Office of Revenue Analysis; National Science Foundation; Michigan Council of Foundations.