Arkansas Receives Rough Grades In ‘National Report Card’ On Manufacturing, Logistics

Arkansas received average or failing grades in eight of the nine categories in the recent 2015 Manufacturing & Logistics Report Card from the Center for Business and Economic Research at Ball State University.

The report from the Indiana University shows how each state ranks among its peers in several areas of the economy that underlie the success of manufacturing and logistics. These specific measures include the health of the manufacturing and logistics industries, the state of human capital, the cost of worker benefits, diversification of the industries, state-level productivity and innovation, expected fiscal liability, the state tax climate, and global reach.

The only category that Arkansas received an “A” grade was in the area of worker benefits costs, which measures non-wage labors costs. Generally, the report said, these costs are affected by local and state public policy (laws), as well as worker demographics, health of the workers, and performance of firms and industry.

Benefits range from a variety of health care issues to liability and casualty insurance, workers’ compensation, and other costs including retirement and other fringe benefits. To measure benefit costs, the 2015 Report Card included data on health care premiums and long-term health care costs, workers’ compensation costs per worker, and fringe benefits of all kinds as a share of worker costs.

However, Arkansas received an “F” grade in the area of worker productivity and innovation, which measured the value of manufactured goods per worker and local firm’s access to inventions and innovation. The report said this area is critical to the long-term performance of a firm and the manufacturing industry as a whole.

“Though innovations and inventions are aggressively sought from across the globe, the presence of local talent in these areas through access to university laboratories and non-profit research activities plays an important role in location decisions by manufacturers,” the report stated.

To measure productivity and innovation, Ball State researcher’s culled information from national reports on manufacturing productivity growth, industry research and development expenditures on a per capita basis, along with the per capita number of patents issued annually.

In the remaining categories, which included manufacturing industry health, state tax climate, global reach and sector diversification, Arkansas received C- and D-level grades.

To view the entire 2015 Manufacturing & Logistics Report Card from Ball State University, click here. The report also includes an insightful study called “The Myth and Reality of Manufacturing in America,” which was sponsored by private sector-led initiative Conexus Indiana.