Eight years of employment growth brings the future of California manufacturing into focus.

California manufacturers are writing the next chapter in a storied century that’s already, in 20 short years, been a blockbuster tale of bust to boom to high anxiety.

Consider a recent report that documents “that since 2001, when China joined the World Trade Organization, to 2018, the Golden State lost 654,100 jobs to the Asian nation, about double the next highest state loss, Texas’ 334,800 jobs.”

It’s a staggering number, but consider that in the same period, total manufacturing employment in California fell from 1,779,000 to 1,320,000, or about 459,000 jobs. California lost more manufacturing jobs to China than it did total jobs during the same period.

That’s largely because California manufacturing has made a comeback, adding manufacturing jobs every year this decade save one after bottoming out in 2010, with net job growth of 1.16 percent the past five years, 1 percent three-year, and 1.27 percent one-year (ending 2018; 2019 final numbers are forecast to remain flat). Today, manufacturing totals 1.32 million jobs in the state.

But as we report every week, manufacturing ebbs and flows through 20+ industries.

Here’s how manufacturing employment data looks over the past 10 years, by industry, ranked by growth (source: Bureau of Labor Statistics):

Employment in only five of 21 industries showed net gains the past 10 years — and it’s modest growth at that:

  1. Beverage Mfg: 3.66%
  2. Food Mfg.: .57%
  3. Electrical Equipment Mfg.: .49%
  4. Transportation Equipment: .32%
  5. Chemical Mfg.: .08%

Growth picked up as the decade progressed. Here’s an industry breakdown with a focus on five-year employment trends:

And here are the numbers sorted by year-over-year growth, 2017 to 2018. Growth industries outnumbering laggards as the decade begins:

Yet the new decade is already notable for a significant headwind that many believe have stopped the manufacturing comeback in its tracks. The tariff war, by objective measurements, has hit manufacturing hard. Quarterly data points to net job losses in the U.S. for the first time in eight years.

California will add manufacturing jobs for the ninth year in the past 10. But the more compelling takeaway from a decade of employment data, is the emergence of a powerful new industry mix reshaping California manufacturing. And despite the pervasive gloom that again seems to have descended on U.S. manufacturing, the mix here and in other states seems poised to drive more growth across America’s domestic manufacturing footprint.

Consider the big growth industries:

  • An inspired new food sector, already one of California’s largest manufacturing industries, is flush with innovation from small and middle-market brands. Growth is statewide, fueled by a global-leading agricultural engine.
  • The same is true of the state’s beverage juggernaut. Change agents in brewing have tipped the balance of power to small-and-middle market brands. Here and across the West, craft makers have won, big beverage has lost — good news for states that have nurtured craft industries. Here, the craft beverage industry has grown to stand side-by-side the state’s spectacular wine industry.
  • California is also very-well positioned in legacy industries turning to advanced machining, automation, and robotics — like aerospace and aviation, automotive including EV OEMs, and other transportation-related sectors emerging in L.A. and other locales. San Diego’s impressive bioscience cluster is another. Companies like Westlake Villages’ inVia Robotics, profiled this week, are fueling industrial change.
  • The state is very capable of competing for new domestic jobs in other promising industries like computers and electronics, to the extent that U.S. brands are reconsidering domestic options. Trends certainly point to a sustained reengineering of offshore supply chains. U.S. companies were reevaluating China before the coronavirus. The trend may accelerate.

In sum, California is well-positioned for growth in the industries that promise to reshape U.S. manufacturing; to capture a higher percentage of the domestic jobs that do materialize in the 2020’s. For every job lost in apparel manufacturing, others are materializing across the region. Will they materialize here? .

Bart Taylor is publisher of CompanyWeek. Reach him at btaylor@companyweek.com.