R.I. earns poor marks on manufacturing and logistics report

Rhode Island demonstrated minimal improvement, and garnered mostly failing grades, in an annual Manufacturing and Logistics National Report from Ball State University’s Center for Business and Economic Research. More

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R.I. earns poor marks on manufacturing and logistics report

COURTESY BALL STATE UNIVERSITY CENTER FOR BUSINESS AND ECONOMIC RESEARCH
RHODE ISLAND earned a D grade for the health of its manufacturing industry and an F for "logistics," in the 2013 Manufacturing and Logistics National Report from Ball State University's Center for Business and Economic Research.
Posted 6/20/13

MUNCIE, Ind. - Rhode Island demonstrated minimal improvement, and garnered mostly failing grades, in an annual Manufacturing and Logistics National Report from Ball State University’s Center for Business and Economic Research.

Every year, the BSU center compiles the report and evaluates states in categories essential to manufacturing and logistics including industry health, state-level productivity and innovation, tax climate and human capital.

“Rhode Island remains one of the least hospitable places to manufacture goods in the United States,” Center Director and BSU Economics Professor Michael Hicks said in a statement. “It appears policymakers in Rhode Island have largely dismissed manufacturing growth as a viable component of the state’s economy.”

Rhode Island earned a D and F, respectively, in manufacturing industry health and logistics industry health in the 2013 report.

The manufacturing industry health was measured in terms of the fraction of total income shared by manufacturing employees in the state, the wage premium paid to manufacturing workers in comparison to other states, and the share of employment in manufacturing per capita.

“Logistics firms depend upon many of the same factors as manufacturing firms … but there is a more complex interplay between local conditions and the existing or planned transportation networks of roads, railroads, waterways, and airports,” said a release accompanying the report.

Rhode Island’s grades in these categories remained the same from the 2012 report.

The state earned its highest grade in sector diversification with a B+, and improvement from 2012’s grade of C+.

Though only earning a D, D, and D- in the categories productivity and innovation, global reach and expected liability gap, the grades indicated moderate improvement from the 2012 evaluation.

Rhode Island earned C-‘s in human capital and worker benefit costs, and an F in tax climate, to round out the evaluation of the Ocean State.

Hicks called Rhode Island's tax climate "dismal." He also pointed out that Rhode Island's inhospitable conditions hinder it when compared to other New England states.

“Within New England, the states of New Hampshire and Maine have become very attractive to manufacturing expansion, while Rhode Island and Vermont have created a policy environment which acts to disincentive manufacturing firms.”

New Hampshire received an A in human capital and a B and B- respectively in manufacturing industry health and productivity and innovation. Maine's highest grade was a B- in human capital.

Comparatively, several Midwestern states achieved impressive grades in several categories. Indiana garnered four A’s in manufacturing and logistics industry health, tax climate and global reach. Ohio also earned three A’s in the same categories excluding tax climate.

CBER prepared the report at the request of Conexus Indiana, the state’s advanced manufacturing initiative. To read the full report, visit: cms.bsu.edu.

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