California’s economy is improving.  Our unemployment rate is down two percentage points over the last year and our state revenue growth has, for the first time in a while, allowed the Governor to project a small surplus in 2013.

Still California has far too many workers either unemployed or underemployed. The state currently has the second largest percentage of underemployed at 18.3 percent. A big reason is that we continues to lag the country in manufacturing employment growth and in the ever-important manufacturing investment trend. In the first three quarters of 2013, California was dead last among all states in per capita manufacturing investments at 1.17 new or expanded facilities per one million people.  Even worse, the state only reeled in 1.97 percent of the nation’s expansions and new sites.

It’s not because California isn’t trying. The state’s rebuilt recruitment agency, GoBIZ, is doing everything they can to pitch our state’s manufacturing benefits — including a new manufacturing sales tax exemption — and recruit new scale ups but the competition is tough.  One of the more telling trends is that we’re lagging more in expansions than we are in new facilities.  That means the existing manufacturers — the ones that know the most about operating in California — are opting to scale up in other regions.

Manufacturing provides a gateway to the middle class for many workers, pays an average $76,000 wage in California and creates many other opportunities in the economy.  Job growth in manufacturing can even allow the state’s most vulnerable to move out of poverty.  Our comfort level with an improving economy must not mask our declining facility investments.  Manufacturing champions like GoBIZ, CMTA and others need the state’s regulators and policymakers to focus on turning this trend around.

Below is a look at how California stacks up to the country.

manufacturing investments