California has entered its fourth straight year of factory losses as 1,525 manufacturing establishments went out of business or relocated over the past 12 months, according to the 2007 Directory of California Manufacturers, an industrial directory published by Manufacturers’ News Inc. MNI reports that California lost 1,525 (5.25 percent) plants and 24,266 related jobs (1.4 percent) since February 2006.
MNI data indicates California’s manufacturing sector began to plummet between 2000 and 2001, with employment dropping at an average 2 percent per year, for a total of 128,296 jobs lost since March 2001. The number of reported plants fell by 4,324 or 13 percent over the same time.
Despite the losses, California is still first in the nation for manufacturing, accounting for 8.7 percent of the nation’s manufacturing employment and 7 percent of its plants. The Golden State represents 61 percent of manufacturing employment in the West and 49 percent of the region’s companies.
“California exports have increased significantly over the past year.” said MNI president Tom Dubin. “However, the state’s business environment is still among the most expensive in the nation, and this continues to have an impact – particularly on small manufacturers.”
Manufacturers’ News reports California is home to 27,434 manufacturers employing 1,661,789 workers. Thirteen percent of California manufacturers have 100 or more employees compared to the national average of 9.7 percent.
Some companies are leaving California for neighboring states. MNI identified 55 companies that left California for other states with 18 percent of these moving to Texas, 13 percent to Arizona, 5 percent to Oregon and 4 percent to Nevada.
Los Angeles is California’s top industrial employer accounting for 6.1 percent of the state’s manufacturing employment, or 101,395 jobs, and ranks as the nation’s fourth-largest manufacturing city by employment and seventh-largest for manufacturing plants. MNI data shows Los Angeles manufacturing jobs are down 2.6 percent from last year, continuing the downward trend the city has seen over the past 10 years. San Diego is 11th in the U.S. by employment, and accounts for 76,763 jobs or 4.6 percent of the state. San Jose ranks 19th and represents another 61,708 jobs.
Southern California accounts for the most manufacturing activity, with 65 percent or 18,025 of the state’s plants, 46 percent of which are located in Los Angeles County. Thirty-one percent (8,483) of the state’s manufacturers are located in Central California, with 20 percent of these centered in the Silicon Valley area. Northern California accounts for 3.4 percent of the state, or 928 plants. MNI data shows Central California lost the largest percentage of manufacturing plants last year at 4.8 percent with Santa Clara County reporting 3.5 percent fewer companies than a year ago.
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