Oregon Ranks Number One Nationally for Manufacturing Location

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The Massachusetts-based institute released a report concluding that many Western and Northeastern states are preferable for manufacturing, despite their higher wages and the conventional wisdom that Southern and Midwestern states are cheapest. The study concluded that Oregon was tops when measured by production costs per dollar of output rather than just by costs, such as labor, tax and energy expenses.

Using data from 2007, the most recently available for the study’s purposes, the institute found that the production cost per dollar of output in Oregon was 70.6 cents, the lowest in the nation. The national average was 83.3 cents. Washington came in at 80.9 cents.

Efficient production, which can be influenced by factors such as access to transportation, can make production costs relatively low even in states that have higher average wages, the institute said in its bulletin summarizing the findings.

The current study is consistent with an earlier study by the institute that measured production cost efficiencies. That study named Oregon, Iowa and Connecticut as the best, calling them 100 percent efficient and benchmarks for the other states.

In addition, a recent Brookings Institute study found that Oregon has the second-largest share of “clean economy” jobs in the nation. The report also describes the Portland metro area as a “multi-dimensional” clean economy.

The report, Sizing the Clean Economy, was created in partnership with Batelle’s Technology Partnership Practice to put some numbers around the “green” or “clean” economy.

Finally, according to an analysis compiled by the Business Journal’s Scott Thomas, manufacturing contributed $38.75 billion to the state’s $174.15 billion in 2010 GSP. Manufacturing accounts for 22.3 percent of Oregon’s gross state product, ranking it No. 2 nationally. That’s just behind Indiana, where manufacturing accounts for 27.2 percent of GSP.

Gross state product is the total output of goods and services within a given state, and the average manufacturing sector contribution nationally is 11.8 percent.

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