Kingsport-Bristol, Johnson City MSA manufacturing real GDP better than it was in 2001 with a lot fewer employees

“When Eastman Chemical sneezes, the Tri-Cities gets a cold.”

It’s been that way for a long time and the current community mindset hasn’t changed. And it wasn’t always just Eastman. Remember the Kingsport Press, Mead, North American Rayon, American Bembert, Raytheon and Exide to name a few?

The Tri-Cities has a long history with manufacturing and its decline leaves many wishing for the days when area cities were comfortable as company towns.

This week’s news that Eastman was doing some more belt-tightening should not have been a surprise, but for many it was – especially for those with fresh memories of Project Inspire and jobs growth.

The reasons for the decline of yesteryear’s manufacturing muscle are many and as varied as who’s telling the story, but there’s one quick reality check to keep in mind for some context before Friday’s Eastman quarterly earnings report.

If you look at the Bureau of Economic Analysis’ web site, you can find GDP data for both the Kingsport-Bristol and Johnson City MSAs. Do some quick 2001 v. 2015 comparisons complimented with the Bureau of Labor Statistics’ numbers on manufacturing jobs and you come up with this:

The real manufacturing GDP for Kingsport-Bristol is 4.4% better than it was in 2001, and manufacturers are doing that with 26.2% fewer employees. That’s primarily due to technology not foreign trade.

The same comparison for the Johnson City MSA shows the 2015 real manufacturing GDP is 22.7% greater than it was in 2001. And that’s being accomplished with 28.2% fewer workers in the manufacturing sector.

If you look at that same manufacturing real GDP on the national level, it’s a 25.9% improvement from the 2001 with 21.6% fewer employees.

It’s nothing especially new. It has happened in various forms every time a new major technological advance took hold.

The bottom line is manufacturing is actually doing fairly well, but it’s the new models not yesteryears’ norms. And yes, this is an example of an instance where the rising tide of growth and better manufacturing profits didn’t raise everyone’s boat.



7 replies

  1. Don. Good article. Pat

    Sent from my iPhone


    • Thanks, Pat. And thanks to another reader I have a request in with the BLS to clarify an issue. That issue focuses on how contract employees are reported. For instance, how are the contract workers at a manufacturing firm classified? Are they classified as manufacturing employees or some other classification like other services?

  2. Quite a revelation!
    Really points to a bigger issue…..can capitalism survive advancing technology?

    • It’s not a new question. If you will remember, there was a time a few years back when economists were saying that Japan would pass the U.S. in world economic leadership. We’re seeing the same thing with China today. When Japan was the issue, no one foresaw a group of American entrepreneurs who would take the fledgling internet, mold it into services and products, then export it world wide. U.S. GDP exploded and all of a sudden it was miles ahead of the pack again. It was an economic war that was almost as important as WWII, but no one talks about it. The solution – I think – is not trying to survive technology but adapting it to a higher economic purpose and become a successful warrior in the war to create jobs.


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