Top 5 States for Manufacturing Space in 2023

In this article, you'll learn:

• The top five states for manufacturing space in 2023.
• Key factors making California, Texas, Ohio, Illinois, and Michigan prime locations.
• The impact of recent trends on manufacturing space demand.
• Opportunities and challenges in each state's manufacturing market.

The United States stands as a powerhouse in global manufacturing but determining the best states for manufacturing space is crucial.

With the current dip in leasing volume and an upcoming influx of over 600 million square feet about to the market, strategic location decisions are more important than ever. This presents an opportune moment to seize the perfect manufacturing space at the best price, advancing your logistics empire and securing a competitive edge in the industry.

So join us as we explore the top states that offer the strongest manufacturing markets and uncover the potential for great deals in this evolving landscape.

1. California

California serves as the primary hub for manufacturing output in the United States, with a staggering number of over 35,000 manufacturing firms and employing more than 1.2 million Californians.

Since surpassing New York in 1965, California's manufacturing sector has been instrumental in establishing new industries and supplying the global market with a wide range of products, including aerospace, computers and electronics, and more recently, zero-emission vehicles. The state continues to strengthen its manufacturing capabilities by venturing into emerging technologies, with companies spanning various sectors such as food and beverage, machinery, computer and electronics, chemicals, aerospace, and motor vehicles. 

Additionally, California's strategic location, extensive transportation infrastructure, and access to global markets make it a gateway for international trade and export opportunities.

Some of the cities with the most interest including San Diego which ranks #5 in the nation for cities with the most manufacturing jobs. As well as Stockton which is emerging as the inland empire of northern California.

Besides location, there are almost 70+ factors that need attention when determining your best option for industrial space. Learn everything manufacturing tenants need to know in the free course. 

2. Texas

The country’s largest state is also the ninth-largest economy out of the world’s nations. Its environment is characterized by business advantages, including a highly skilled workforce, booming infrastructure, reasonable regulations, incredibly low tax burdens, and a reasonable cost of living.

For an unprecedented 21 years in a row, Texas been the leading exporting state. With an impressive $203.49 billion worth of manufactured goods exports in 2020 alone, Texas continues to play a pivotal role in the global trade market.

Not only this but Texas is the source of more corporate relocations than any other state, likely because of its irrefutable reputation. It is consistently named the “Best State for Business” by our nation’s top CEOs. Not even for three or five years, but seventeen consecutive years.  

Texas also boasts numerous strong cities bursting with corporate popularity Including Austin, Dallas, San Antonio, and Houston. 

Austin, in particular, is currently experiencing a surge in demand, and a major reason for this is the city's thriving manufacturing sector. Companies such as Tesla and Samsung have recently announced plans to build major manufacturing facilities in the area, leading to an influx of contracts and opportunities for suppliers, third-party logistics providers, and other ancillary manufacturers.

As these companies race to capitalize on the potential opportunities presented by these large-scale manufacturing operations, demand for industrial space in Texas is only expected to continue growing.

3. Ohio

Ohio is home to robust manufacturing system, dominating it’s work force and industrial pipeline

With manufacturers contributing 16.01% to the state's total output and employing 12.22% of the workforce, the sector plays a significant role in Ohio's economy. In 2021 alone, manufacturing output reached an impressive $114.76 billion. Additionally, Ohio's manufacturing prowess extends beyond its borders, with the state exporting approximately $50 billion worth of goods to over 200 countries and territories. These statistics highlight Ohio's manufacturing strength, making it a compelling choice for businesses in the industry.

And expansion is only set to grow more as high-powered investments are poured into the state.

Amazon has committed to investing approximately $7.8 billion in expanding its data center operations in central Ohio by the end of 2029. This significant investment not only underscores Amazon's confidence in the region but also reinforces Ohio's aspirations to become the leading technology hub in the Midwest. It is also record-breaking, the state’s second-largest private investment in its history.

The expansion of Amazon's data centers will undoubtedly bolster the state's technological infrastructure and drive economic growth.

4. Illinois

Illinois' manufacturing market offers a mix of advantages and challenges. On the positive side, the state boasts a skilled workforce and a strong emphasis on innovation, making it an attractive destination for companies. However, Illinois also faces high business costs, which can be a disadvantage for manufacturers. Because of this the state has withstood not only population decline, but harsh losses in its business sector. 3 of the state’s 35 Fortune 500 companies distanced themselves from Illinois earlier this year.

Despite these challenges, the state's manufacturing sector remains resilient and ranks among the top manufacturing states in the nation, showcasing its enduring competitiveness and continued importance in the industry.

Because, The state's strategic location in the heart of the Midwest provides easy access to major markets and transportation networks. And lllinois' rich history in various industries, such as automotive and machinery, provides a deep pool of expertise and resources. There is a manufacturing precedent that is impossible to ignore.

Besides this, the recent exodus presents more opportunities to prospective tenants. In an oversaturated market, landlords will get more competitive to lure in your tenancy. This means an abundance of properties to scan and the power to drive harder deals when you do find your ideal match.

5. Michigan

Michigan's industrial manufacturing market is a force to be reckoned with, securing its spot as the fifth-largest provider of manufacturing jobs in the country.

One of Michigan's key strengths lies in its automotive industry, which has long been a cornerstone of the state's manufacturing sector. Home to the Big Three automakers - General Motors, Ford, and Stellantis (formerly Fiat Chrysler) - Michigan has a deep-rooted automotive heritage and expertise. This strong foundation has not only attracted global automotive giants but also fostered the growth of a vast network of suppliers and manufacturers in the automotive supply chain.

As the automotive industry undergoes a shift towards electric vehicles, Michigan is also emerging as a hub for semiconductor and EV battery suppliers, further solidifying its position as a key player in the evolving manufacturing landscape.

Michigan's advantageous location also plays a significant role in its manufacturing prowess. Situated in the heart of the Great Lakes region, the state offers convenient access to major markets in the United States and Canada. This strategic position enables efficient transportation and distribution of goods, facilitating supply chain management and reducing logistical costs for manufacturers.

Top Locations for Manufacturing Tenants

In conclusion, the manufacturing landscape in the United States is diverse and dynamic, with California, Texas, Ohio, Illinois, and Michigan emerging as standout states. 

By choosing to establish their operations in the top states for manufacturing, industrial tenants position themselves for success, tapping into the resources and networks that these top manufacturing states provide. To learn how to stay on top when it comes to your warehouses leases, enroll in our free Ultimate Guide to Warehouse Space course.