The Former Rust Belt Now Shines as Manufacturer of Economic Growth

Article excerpt

THE Midwest, long the dead weight of the economy, is rumbling today as the nation's most robust engine for economic growth.

Midwest manufacturers have recently helped prevent the slowing national economy from sputtering into outright decline.

In some pockets across the region, the vitality is extraordinary. In Oshkosh, Wis., Armstrong-Blum Manufacturing Company is having trouble fully staffing its machine-tool plant. Winnebago County, Wis., is boasting an almost unheard-of unemployment rate of less than 2 percent. More broadly, Michigan logged an unemployment rate in October of 4.4 percent, its lowest in more than 25 years.

The numbers stand in sharp contrast to such states as California, where the jobless rate persists at 7.8 percent.

Indeed, the 10-state Midwest region boasted the lowest unemployment rates of any region last month, helping lower the nation's jobless rate to 5.5 percent, according to the Labor Department.

"Employment in the Midwest has held up and we're able to act as a floor" for the economy, says David Allardice, senior vice president at the Federal Reserve Bank of Chicago.

Should current trends continue through next month, the Midwest will have posted 10 straight years of employment growth greater than the national average. This is the longest such run since World War II, according to the Federal Reserve.

From auto-parts plants in northern Michigan, to the hulking steel mills of northwest Indiana, to washing-machine assembly lines in central Iowa, Midwest factories are buzzing with a verve unmatched by any other region. The Midwest is not as strong as it was during the early stage of the current recovery. But it is holding up better than anywhere else.

Buoying the nation

This is the second time this decade that the Midwest - the historic hub of US industry - has significantly buoyed the national economy. Regional manufacturers led the country out of the 1990-1991 recession.

For years, Midwest manufacturers stumbled because of inefficiency and stiff foreign competition. Today, they more often stand as models of stable employment and streamlined production.

"The term Rust Belt is obsolete; American manufacturers came out of the last recession far more competitive than they started in the 1980s," Secretary of Labor Robert Reich told the Monitor.

Midwest manufacturing, although slowing, continues to grow faster than manufacturing across the national economy. Regional exports, a valuable prop during a recession, are outstripping the national growth rate of exports. Midwest manufacturing exports last year grew three times faster than the national average, according to the Commerce Department. …