Wisconsin and Manufacturing Go Together Like Cheese and Packers

Wisconsin Manufacturing

Today we begin the journey back home, reshoring from our World of Manufacturing series to discover incredible manufacturing efforts in the good ol’ US of A. In the next few weeks we will be talking about the Top 20 US Manufacturing States by GDP as well as the industries and trends that fuel their economy.

Wisconsin, although best known for the Packers, cheese, and the Harley-Davidson Museum, has a robust manufacturing sector that contributes greatly to the overall economy. And according to Forbes magazine, it is #27 in the list of Best States for Business. Inside the manufacturing sector, we can highlight several key industries with the biggest contributors to their GDP being the following:

Paper Manufacturing

Only last year, the state generated 5.3 million tons of paper. The important thing about this industry is that it helps the promotion of production chains since there are other industries in the state of Wisconsin associated with the paper industry.

The industry generates around 5 billion dollars each year and is the biggest employer in Wisconsin. The Wisconsin Department of Natural Resources calculates that the employment is divided between 2 areas. Converted Paper Product Manufacturing area and in the pulp, paper, and paperboard mills area. The state employs 8.3% or about 1 out of every 12 of the United States paper industry workers. When combined, paper and allied firms account for 1 in every 11 manufacturing jobs within the state.

Dairy Manufacturing

America’s Dairy land. It’s not a slogan that they have chosen without earning. Dairy means a lot to Wisconsin. For example, it contributes four times more to Wisconsin’s economy than citrus to Florida’s.  According to Wisconsin Milk Marketing Board, the sector contributes $43.4 billion annually to Wisconsin’s economy. That’s why this state is the nation’s leading dairy producer. With a strong specialization in producing cheese, around 90% of Wisconsin milk is designated to cheese-making. For years, the history of the state has been deeply linked to this product.

In 1890, the first dairy school was created in Wisconsin, and in 1920, it became the first state to create laws and regulations for dairy. In that same decade, Wisconsin was already classifying the milk for its quality. It is no wonder why in 1910 it became the number one cheese producing state, passing New York. Wisconsin is also the only U.S. state that requires that a licensed cheese maker supervise the making of commercial cheese, which says a lot about the importance they give to the creation of the product.

Information and Technology 

While their technology industry is not necessarily manufacturing-based, we know that technological advancement leads to a flourishing manufacturing sector. This industry has been developing quickly in the past two decades. When we talk about IT in Wisconsin, we mainly speak of the Madison region. Here, the industry grew around 31% from the year 2010 until 2015. In 2016, Madison saw a 145% increase in venture capital funding for startups. While the total investment and revenues themselves are far from the likes of Silicon Valley, it is still very impressive especially when you compare the operational costs of Wisconsin with, for example, California.

Today the Madison region is one of the most successful clusters within the IT industry. It serves not only as a bastion for entrepreneurs in technology but also as a new area for enterprises to establish locations and make more profits than in traditional areas. The Madison tech sector specializes in software publishing, computer systems design, games development and healthcare information technology. All this development is thanks to the highly sophisticated transportation system, quality infrastructure, highly educated and diverse workforce, and the role that the University of Wisconsin-Madison plays in encouraging research and partnerships.

Wisconsin seems to be doing well for itself, showing growth in many directions. However, while we see increases in Wisconsin’s rate of employment and GDP, we are hesitant to report it is not at the same rate as national numbers. Will recent hikes in technology send manufacturing economic indicators sky rocking? Perhaps, but one thing is for sure, Wisconsin is moving in the right direction.

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Manufacturing in Canada is A Substantial Contributor to Their GDP

manufacturing in Canada

Canada has a very important manufacturing industry and is among the wealthiest nations in the world with a purchasing power of $1.75 trillion and a nominal GDP of $1.6 trillion, ranking it the 10th largest GDP in 2016. Canada is also known to be one of the countries with a highest economic freedom index. The Canadian economy, as the economy of most developed countries, is dominated by the tertiary sector, where about three-quarters of Canadians are employed.

Today, manufactured products account for 11 percent of the Canadian GDP. It is the second largest economic sector after real estate.  In Canada, manufacturing is a well-paying and high-skilled sector that pays about 1.85 billion dollars weekly to Canadians, which is more than any other sector in the country. It benefits about 1.7 million Canadian workers through full-time jobs and it also impacts about 3 million indirect jobs. Canadian manufactured products represented 61% of total merchandises exported by Canada.

Autos and Aircraft

The top manufacturing sector by sales in Canada is transportation equipment which generates $112.6 billion annually. Canada is home to major automobile makers from the United States, Japan and different Canadian firms such as Magna International and Linamar Corporation. However, Canada produces much more than just cars and motorcycles. They also provide a significant amount of jets.  For example, Bombardier Inc. is a Canadian multinational aerospace and transportation company and the third largest manufacturer of commercial aircraft in the world.

Food Processing

The second most important manufacturing industry is food processing which sold more than $107.1 billion each year since 2014. Companies such as Beaver Buzz (energy drinks and teas), Just Us! Coffee Roasters Co-op (Coffee), DavidsTea (teas) represent the largest companies in this sector. The US is the largest purchaser of Canadian food products buying more than half of all food exports. Their stricter regulations of GMOs-free and organic specialty foods have made them a primary producer for the US health food market.

Energy

Petroleum and natural gas products are responsible for generating 83.1 billion of the Canadian economy. In fact, Canada has the third-largest oil reserves in the world and is the fifth largest oil producer. There are about a dozen of oil companies in Canada and among the most important are Imperial Oil, Shell Canada, and Suncor Energy. Guess who buys the majority of Canadian petroleum and petroleum product exports? The US, of course. In fact, Canada is the largest source of US petroleum imports.

The key to understanding the prosperous Canadian economy is the development of the manufacturing industry. Canada has been focused on having one of the most educated labor forces, which is an important basis to sustain the development of the economy and the welfare of the population. With a well-developed infrastructure since the 1960’s, Canadian industry has thrived. The investment and growth of this sector have allowed the promotion of technology and other public projects further fueling wealth and stability.

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Manufacturing Growth in France Could Propel it to Number 3 in The World

French Manufacturing

France is the fourth largest industrial manufacturer in the world. Twenty percent of their GDP comes from industrial manufacturing, and their success shows no sign of slowing. With an annual growth rate of 0.5%, manufacturing serves as a primary source of income and an essential piece of the economy. As the tenth largest economy in the world, Frances boasts a $2,699 trillion GDP and a 1.1% GDP real growth (2016).

One of the keys to French manufacturing success is the diversity of products they produce. With their strength in technological innovation and knowledge, they can produce goods in almost any industry:  food products, chemicals and pharmaceuticals, textiles, vehicles, metallurgy, and machinery. Today, we talk about French industries with the most significant contributions to their global standing.

Gourmet Food and Wine

The French have always been famous for their food, but maybe you didn’t know about their food and beverage manufacturing and exports. They produce and export gourmet and artisan cheeses (as the second largest producer after the US), wines (as the second biggest producer after Italy), meats, and bread.

This industry plays a major role in the economy by employing more than 500,000 French workers across more than 11,000 companies. The beverage sector alone contributes more than 11 billion euros in annual revenue. Such products are particularly beneficial because they add value to local agriculture while strengthening trade agreements. Nearly 30 percent of all food and beverage exports are sent outside of the EU, particularly to Asia and North America. Trade agreements continue to open a variety of other relationship possibilities.

Chemicals and Pharmaceuticals

France’s Chemicals and Pharmaceuticals industry occupies sixth place in the world. Their production of basic, specialty, and fine chemicals earn the country prestige only behind China, the US, Japan, Germany, and South Korea. Specifically, France is THE world leader in cosmetics and perfumes.

While they export these chemicals primarily within the EU, they also export to parts of Asia. Nearly 3,500 chemical and pharmaceutical companies employ over 156,000 people to produce around $110 billion Euros in revenue. These sales alone speak for the significance in the French economy.

 Automotive Investment

France produces an average of 4 million vehicles each year. This places them as the 5th largest automotive producer in the EU. However, their innovation is the industry is well-known and highly regarded.

To the same end, the sector is a magnet for foreign investment which makes it a priority industry for the French government. In recent years, they have redirected policies to aid the development of auto manufacturing while benefiting both local and foreign investors.

This year, France continued to maintain their PMI above 50, which firmly places manufacturing as a primary element of their economy. In addition, the data shows a steady rise in production volume, exports, and employment growth. While France currently sits in a strong global manufacturing position, all indicators point to their continuing ability to flourish with innovative technology, skilled workers, and diverse products. With all market trends pointing up, they may be headed to the top three soon.

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