Manufacturing’s Unexpected Comeback
After decades of decline, something remarkable is happening in America’s old industrial heartland. The CHIPS and Science Act, which became effective in August 2022, was designed to rebuild the manufacturing sector with thousands of jobs and research programs in states like Ohio focusing on making products like semiconductors due to the global chip shortage of the early 2020s. These aren’t just small-scale operations either – we’re talking about massive investments that are creating thousands of new jobs across the region.
The numbers tell a powerful story. The U.S. economy is currently seeing a manufacturing revival, sparked by rising tensions with China. What’s particularly striking is how this revival is being driven by a combination of government policy and private investment. Companies are finally recognizing that the Rust Belt offers something unique – a skilled workforce, established infrastructure, and significantly lower costs than coastal regions.
Columbus Leads the Revival
The top Rust Belt revival city is #1 Columbus, OH. It ranks #1 in housing and is in the top 5 for economics, workforce power, and social factors. This isn’t just about manufacturing either – Columbus has managed to diversify its economy in ways that other Rust Belt cities are now trying to emulate. The city has become a hub for logistics, technology, and financial services.
Madison, WI, is #1 in both economy and workforce, with the top overall GDP growth over the past 5 years and the #2 lowest unemployment rate. These success stories are particularly important because they show that the Rust Belt revival isn’t just about bringing back old industries – it’s about creating entirely new economic ecosystems.
Detroit’s Dramatic Transformation
Detroit, once the poster child for urban decay, is experiencing its own renaissance. Detroit’s jobless rate is expected to average 8.2% this year but then edge down to 7.1% by 2028, resulting in the city’s highest labor force level since 2013. That’s a dramatic improvement from the double-digit unemployment rates the city faced just a few years ago.
The transformation is being driven by strategic investments in key sectors. They predict the city will add 4,900 jobs in the remainder of this year, 4,300 jobs in 2024 and then add, on average, 1,900 jobs per year from 2025 through 2028. What’s particularly encouraging is that these aren’t just any jobs – For employed Detroit residents, average pay is expected to increase 42% from 2019 to $50,000 by 2028.
Technology Investment Transforms Wisconsin
Wisconsin is witnessing one of the most significant technology investments in its history. These investments include $3.3B in cloud computing and AI infrastructure, the creation of the country’s first manufacturing-focused AI co-innovation lab, and an AI skilling initiative to equip more than 100,000 of the state’s residents with essential AI skills. First, Microsoft will invest $3.3B between now and the end of 2026 to expand its national cloud and AI infrastructure capacity through the development of a state-of-the-art datacenter campus in Mount Pleasant, Wisconsin.
The project is expected to bring an influx of 2,300 union construction jobs to the area by 2025, as well as providing long-term employment opportunities over the next several years. This isn’t just about creating jobs – it’s about positioning Wisconsin as a leader in the AI revolution. The state is proving that you don’t need to be Silicon Valley to attract cutting-edge technology investments.
Pittsburgh’s Healthcare and Tech Boom
Baltimore has one of the largest clusters in healthcare jobs in the U.S. Both Baltimore and Pittsburgh also have started to lure businesses and talent in tech and even finance. Pittsburgh’s transformation from steel town to tech hub is particularly remarkable. The city has leveraged its world-class universities and research institutions to become a major player in robotics, artificial intelligence, and biotechnology.
The healthcare sector has been particularly strong, with major medical institutions expanding their operations and creating thousands of high-paying jobs. This diversification strategy has proven crucial – rather than trying to recreate the past, these cities are building entirely new economic foundations.
Housing Affordability Drives Population Growth
The Rust Belt is one of the few regions in the U.S. where middle-class families can more easily afford to buy a home as real estate prices are considerably lower than elsewhere. This affordability advantage is becoming increasingly important as housing costs in coastal cities continue to skyrocket.
Young professionals are starting to take notice. Winning Gen Z workers is key to Rust Belt revival. The combination of lower living costs, growing job opportunities, and improved quality of life is making these cities attractive to younger workers who might have automatically headed to New York or San Francisco in the past.
Manufacturing Faces Persistent Challenges
However, the picture isn’t entirely rosy. This group of states—Pennsylvania, Ohio, Indiana, Illinois, Michigan and Wisconsin—has collectively lost 58,000 manufacturing jobs (-1.7%) since 2019. Not a single state in the Rust Belt has returned to its pre-pandemic employment level. This reality check shows that while progress is being made, the region still faces significant headwinds.
In contrast, states in the Sun Belt and Mountain West, such as Florida, Texas, and Utah, are well above pre-pandemic manufacturing employment. The post-pandemic period also shifted manufacturing growth away from rural areas and towards small urban counties, which have become the sector’s primary drivers of job creation. This geographic shift means that Rust Belt states are competing not just with foreign manufacturers, but with other U.S. regions that offer different advantages.
Pennsylvania’s Strategic Manufacturing Investments
Pennsylvania is taking a targeted approach to manufacturing revival. Today, Governor Josh Shapiro announced the Commonwealth has secured a $6.2 million investment from metal fabrication company Baltimore Fabrication (BaltimoreFab) to expand its manufacturing operations in York County, breathing new life into a vacant building. This project will create at least 75 new, full-time jobs over the next three years while also retaining 47 current positions.
The state is also investing heavily in workforce development. Governor Shapiro’s 2025-26 budget proposal calls for new and expanded investments to advance the 10-year Economic Development Strategy, boosting Pennsylvania’s competitiveness, including: $12.5 million dedicated to WEDnetPA to expand our workforce and close critical workforce gaps. This focus on skills training is crucial for ensuring that local workers can compete for the high-tech manufacturing jobs being created.
The Automation Challenge
The biggest challenge facing manufacturers continues to be attracting and retaining skilled workers. The labor shortage is driving increased investments in employee retention, training programs, and automation. This creates a complex dynamic – while automation can help manufacturers stay competitive, it also means that the new jobs being created require different skills than the old industrial jobs.
More manufacturers are integrating artificial intelligence (AI) into administrative functions, with growing interest in AI-driven production efficiencies. This technological transformation is reshaping what it means to be a manufacturing worker in the 21st century.
Gary, Indiana Shows the Downside
Not every Rust Belt city is experiencing revival. On the other hand, cities like Gary, once one of the largest industrial cities in Indiana, have been unable to make a recovery despite investment and reforms. 30% of Gary’s homes are vacant, and its high rate of unemployment at 10.3% doesn’t show many signs of improvement.
Unsurprisingly, Gary, IN, called the country’s “most dangerous city,” is least positioned for revival in 2024. “Scary Gary” is tied for the worst economic growth over the last 5 years, with negative GDP growth since 2017. Gary serves as a sobering reminder that economic revival isn’t automatic – it requires strategic planning, investment, and often a bit of luck.
The University Town Advantage
Three football powerhouse college towns make the list: Columbus, OH, Madison, WI, and South Bend, IN. A 4th top-ten city, Grand Rapids, MI, is home to Western Michigan University, showing that university towns are today’s hot regional economic hubs. This pattern isn’t accidental – universities provide the research capabilities, skilled workforce, and entrepreneurial ecosystem that modern economies require.
These university towns are becoming magnets for startups and established companies looking to tap into research capabilities and recruit top talent. The combination of academic resources and lower operating costs is proving to be a winning formula for economic development.
Supply Chain Resilience Drives Investment
The pandemic-era global supply chain crisis revealed how vulnerable production chains can be if key inputs become unavailable for longer periods. Consequently, companies have started to onshore some production domestically, also to become less reliant on China. This trend, known as “reshoring,” is creating new opportunities for Rust Belt manufacturers.
Companies are recognizing that having shorter, more resilient supply chains is worth the extra cost. The Rust Belt’s central location and existing manufacturing infrastructure make it an attractive option for companies looking to reduce their dependence on overseas suppliers.
The Future Outlook
The Rust Belt is likely to make a comeback, and it’s about time. With recent positive developments for these economically hollowed-out states, and the 2024 presidential election in full swing, the Rust Belt is set to take center stage in the coming months. The political attention these states are receiving is translating into increased investment and policy support.
The combination of federal infrastructure spending, private investment, and state-level economic development initiatives is creating a perfect storm for growth. While challenges remain, the foundations for a sustained economic revival are clearly being laid across the region.
The Rust Belt’s comeback story is still being written, but the early chapters are surprisingly optimistic. These states are proving that with the right combination of strategic investment, workforce development, and economic diversification, even the most challenged regions can find new life. The question now isn’t whether the revival will continue, but how far it will go.
