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Lower survival rates of textile units in US rural areas
Sep '17
Survival rates were significantly lower for textile and apparel manufacturing industries in rural areas in the United States between 1996 and 2011, according to a new report by the Economic Research Service of the US Department of Agriculture (USDA). Trade-related policy changes and automation were two reasons for this decline during that period.

In rural America, textile and apparel manufacturing industries had a 26 per cent survival rate between 1996 and 2011. During the same period, rural plants as a whole had a 57 per cent survival rate, according to the report called ‘Rural Manufacturing at a Glance’, which examines the manufacturing sector in rural America.

Manufacturing represented a greater share of both private non-farm rural jobs and rural earnings compared to urban areas in the United States in 2015. There were about 2.5 million relatively well-paid manufacturing jobs in US rural areas in 2015.

But manufacturing is no longer the driver of job growth that it once was. Manufacturing’s share in private non-farm jobs was 14 per cent in rural areas compared to 7 per cent in urban, whereas its share in rural earnings was 21 per cent compared to 11 per cent in urban earnings in 2015.

Lower wages, property taxes and land prices in rural areas generally attract manufacturing firms. In the 1980s, when import competition forced domestic manufacturers to lower costs, the manufacturing sector’s share of employment and earnings in rural areas began to exceed that in urban areas.

According to the study report released in May, rural manufacturing employment was smaller both in relative and absolute terms in 2015 than in 2001 and became a smaller piece of a larger pie. Rural manufacturing plants have a higher survival rate than those in urban areas, the USDA said on its website. (DS)

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