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Why the Manufacturing Business Industry Loves St Louis

A combination of several factors makes St. Louis a preferred location for the manufacturing industry. For example, St. Louis developed into a major freshwater port during the 19th century, and that role has continued to make it a natural manufacturing hub. The population of the St. Louis metropolitan area is more decentralized than other metropolitan areas in the United States, which also favors manufacturing. Employment rates, new development and increasing occupancy show the benefits of owning a manufacturing business in St. Louis.

The estimated population of St. Louis was 308,626 in 2018, relatively modest in comparison with the population of almost 3 million for the Greater St. Louis Metropolitan area. This metropolitan area is the largest in Missouri and the 19th-largest in the United States. St. Louis’ economy is based on manufacturing as well as service, trade, transportation and tourism. However, it’s also becoming known for its presence in the medical and pharmaceutical sectors. The St. Louis metro area is home to many major corporations, including nine of the 10 Fortune 500 companies based in Missouri.


The Beige Book, published by the Federal Reserve Bank, reports that manufacturing throughout the St. Louis area experienced a modest increase in 2017, along with a slow growth rate in production for the district. General retailers and auto dealers also reported a slight increase in spending, although auto parts suppliers reported their sales were slightly down. The manufacturing market is expected to remain the same in the St. Louis area for 2018.

Employment increased moderately during 2017, including a 0.8 percent increase in jobs. The non-seasonally adjusted unemployment rate in St. Louis was 3.4 percent, slightly below the national average of 4.1 percent for this period. This overall employment increase occurred despite the announced layoffs of several major companies in the area, including HM Dunn, AeroSystems Inc., Kellogg’s, Serco Inc. and TD Ameritrade Holdings Corp.

These layoffs were more than offset by other companies adding jobs in St. Louis such as the Ballpark Village Phase 2 construction project, which will add 1,500 temporary construction jobs and 1,000 permanent jobs in St. Louis. Lowe's also announced it will be hiring 700 employees for its St. Louis stores. Other companies that will be making major hires in the area during 2018 include Amazon, Microsoft and US Bank. The merger between Bayer and Monsanto is also expected to add jobs to the St. Louis market.


The large-scale development of industrial properties is another indication of the favorable conditions for manufacturing in St. Louis. For example, the Lawrence Group is developing City Foundry STL in the Cortex Innovation District. Phase I of this 15-acre urban industrial space is already underway and should be complete in 2019 at a cost of $185 million. It will have 108,000 square feet of office space, with venues that include the Alamo Drafthouse Cinema and Punch Bowl Social. City Foundry STL will also feature a restaurant with gaming, which is a new concept for St. Louis.


Rental rates for the industrial market continued to grow during 2017 in St. Louis, reflecting the national trend for this sector. The average rate for industrial space increased from $4.36 per square foot (psf) to $4.57 psf during 2016. The net absorption of space for this sector has also increased since 2012, with the occupancy rate increasing from 94.4 percent to 94.7 percent during 2017.

New construction increased the total industrial space available in St. Louis by delivering 5,177,606 square feet to the market in 2017. This additional space included 1.2 million square feet from Premier 370, which houses tenants such as Best Buy, RB Manufacturing and Reckitt Benckiser. Several other major construction projects broke ground in the St. Louis area during 2017, with 1,673,340 square feet remaining under construction by the end of the year.

If you have interest in finding your own manufacturing business, or, have one that you are ready to sell, please contact LINK St. Louis today at (314) 487-0005 or email to to speak to an experienced, professional business broker.