The US rail manufacturing industry, which includes 247 manufacturing facilities across 35 states, could see considerable growth in the coming years, as Amtrak upgrades its railcars and adds high-speed trains, and as federal legislators consider a transportation bill that includes significantly greater investments in public transit, according to a new study from the Apollo Alliance.
Although the US rail manufacturing industry is relatively smallthe report's authors estimate it employs between 10,000 and 14,000 workersanalysts expect it to grow due to pent-up demand for intercity and urban rail service. In particular, the states with the most manufacturing facilities, including New York (32 rail manufacturing facilities), Pennsylvania (26), Illinois (23), California (22) and Ohio (13), are likely to see significant economic benefits if the transportation bill passes. In fact, another study released this week by Transportation for America and the Economic Policy Institute, finds that a $500 billion transportation bill that invests heavily in public transit will create 7.2 million jobs across the economy, including some 761,321 manufacturing jobs, of which 168,024 jobs would be located in the rail manufacturing sector.
Still, there are significant gaps in the domestic rail manufacturing value chain. Even though US domestic content rules have ensured that 60 percent of content is U.S.-made, higher-value activities are mostly performed abroad. The Apollo Alliance report suggests several measures to help develop the US industry and capture higher value activities in its supply chain. This list of recommendations includes:
Improving the accountability and transparency of Buy America and Buy American rules.
Revisiting U.S. standards and specifications to stabilize the market and bring down costs.
Increasing government support for research and development (R&D).
Adopting a collaborative, orchestrated approach to expanding the supply chain, encouraging innovation, and bringing new technologies all the way through prototyping and commercialization.
"Our research found that while there is already a healthy chain of U.S. manufacturing locations that produce components and systems for rail cars, the sector still has plenty of room to grow if the next federal transportation bill prioritizes public transit and rail investments," says Marcy Lowe, a senior research analyst at the Duke University Center on Globalization, Governance & Competitiveness (CGGC) and the report's lead author.