The Power of Rural Manufacturing and its Future in the Rural Economy

When living out in the “boonies” of a rural community, the availability of jobs is a serious issue. Unless you are someone producing something from scratch (farming, ranching, etc.), you will have to work for someone online or off.

Rural manufacturing provides more jobs and higher earnings in most rural areas than any other job section (including mining). Food manufacturing, like processing chickens or harvesting crops, provides the most jobs. The highest incomes come from manufacturing machinery and essential equipment because urban areas don’t want those plants near schools, homes, and resources.

A lot has changed in the demographic makeup of rural real estate since the 1970s. Where we mostly had manufacturing and farming to rely upon, now there is agriculture, forestry, government organizations, services, wholesale, and retail trade.

The problem is that over the past few decades, the U.S. rural economy has shifted from a production mindset to a knowledge-based operation. As more jobs open up in specialized fields like IT, content creation, and service-based management, rural economy jobs suffer. From 2000 to 2021, farm prosperity and farm wage employment went down from 3.1 million jobs to only 2.6 million (roughly a 17% decrease). However, the value of agricultural production increased by about 47%.

What this means is there is plenty of demand for the production of essential manufactured items from rural communities, but not a lot of jobs opening up to get that work completed.

Investing in the Rural Economy

Rural real estate and manufacturing are changing, and so should investment priorities in these areas. There are many opportunities because local, state, and federal entities are heavily incentivizing the advancement of complementary sectors to manufacturing like agriculture, tourism, and energy production.

Consider for a moment the three main challenges of rural real estate communities:

• Underutilization or unsustainable use of natural resources.
• A general lack of access to urban socioeconomic infrastructure.
• Lack of access to clean water for household and agriculture purposes.

Those are not hefty challenges when appropriately addressed by an experienced investor. In fact, they can be utilized as leverage points for creating housing, jobs, and businesses in rural manufacturing or other sectors.

For example, you can apply for a Rural Economic Development Loan and Grant program to provide funding for access to modern utility organizations. These are interest-free loans for developing connections between a business, a residential community, and a utility.

Another excellent example is the Inflation Reduction Act. The IRAs help in building economic growth in rural sectors, spurring over 52 major rural manufacturing projects that created 67,000 jobs and around $2 billion in worker income in 2023.

How to Leverage the Rural Economy

Finding the right process balance is the trick to taking advantage of these incentives and creating new rural manufacturing entities or businesses. A lot of planning and communication between you and the potential area is necessary to smooth out misunderstandings and present clear value propositions so you can build upon your investment.

A good process flow for expanding into the rural economy would be:

• Identify & Target: You want to look for businesses that would thrive in the given rural community. You don’t want to open a boutique manufacturer of truffle oil if it doesn’t work in the given environment or has a scent from production your workers won’t appreciate. It helps to attend local conferences in the area to see what is needed and who is willing to partner up.
• Use Incentives: Every single region, state, and business community has direct access to loans, tax incentives, and grants for their given rural real estate area. The government is well aware that rural communities are crucial to the production of many commodities and need help attracting investors just like you to build or grow something economically solvent.
• Marketing: Even if all you are doing is building a set of housing units to support local rural manufacturing, you need to market to your target audience effectively. Have an online and in-person presence that communicates what you are doing, how you are getting it done, and the benefits it brings to the surrounding area in terms of actual jobs, funding, or services.
• Cultivate Your Environment: Finally, get involved. If you are the primary investor who prefers to stay out of the limelight, hire locally and have your supervisor or manager attend local development events. Show you are present in the community and want to be a contributing member. One of the more beneficial parts of investing in rural communities is the outpouring of support you’ll receive if you only demonstrate your commitment to helping others.

You will want to create jobs. The rural economy wants job creation. For every $100 spent on production expenses in agriculture, about $10 goes toward labor. You’ll want to work on your labor costs and insurance before placing your investment so you are offering decent paying wages while still earning a strong ROI for your efforts.

Conclusion

There is no denying the USA has moved from a purely product-based society to one thriving on services. However, we have one of the most natural resource rich countries in the world with plenty to go around if leveraged in the right way.
Investing in the future of the rural economy is a smart bet, as long as you’re willing to work. When your primary rural manufacturing entity or supporting efforts create jobs, wealth, and prosperity, you’ll receive a massive outpouring of support from hardworking families and be able to build a thriving business.