Top States for Medical Device Manufacturing

As labor markets continue to tighten, manufacturers are looking to optimize their supply chain networks and real estate footprint. Site Selection Group, a global location advisory and economic incentives firm, has observed this happening in the medical device manufacturing sector.

Like other manufacturing sectors, medical device manufacturers are exploring a multitude of options to optimize their footprints. This includes consideration of on-shoring (or near-shoring) production activity from overseas. Site Selection Group works with a number of medical device manufacturers to help them identify the optimal location for new, expanded or relocated facilities. 

Top states for medical device announcements

Site Selection Group looked at location trends in the medical device sector and researched the top states for medical device manufacturing announcements over the past three years. Many of the states at the top of the list are commonly thought of as hubs for medical device manufacturing (e.g. Florida, Wisconsin, Indiana and Minnesota).  At the same time, a less established medical device manufacturing location, Arizona, appears on the list due in part to a significant recent project win. For the right project, a location such as Arizona could be an attractive option for companies looking to leverage West Coast market access along with a business-friendly environment.  

Top states for medical device manufacturing announcements since 2014

Two large medical device manufacturers made significant announcements in Florida to help drive that state’s top ranking:

• Arthrex  A manufacturer of surgical equipment based in Naples, Arthrex made two major announcements in 2016. The company announced a 350-job expansion in February.  In July, the company announced an additional 560 jobs along with $63 million in capital investment. For the July announcement, the company is eligible to receive nearly $6 million from the Florida Qualified Target Industry Program, the state’s Quick Action Closing Fund, and other local programs.
• Braun Medical Inc. The medical device manufacturer with U.S. headquarters in Pennsylvania announced its first Florida manufacturing operation in Daytona Beach in April. The project will include $100 million in capital investment and 175 new jobs. Among other incentives, the county offered the company a seven-year exemption on ad valorem taxes.

While Florida and other states at the top of the list are competitive locations for medical device manufacturing, other locations may also provide an attractive opportunity for growing companies. For example, San Diego-based Dexcom announced a new manufacturing facility in Mesa, Arizona, this past June. The company plans to build a 180,000-square-foot facility that will employ more than 500 people.  Both the state and the local community offered financial incentives to help land the project. The company makes glucose monitoring products for diabetes patients. 

Mexico can be an attractive option for the right project

Especially for large-scale projects, Mexico can also be an attractive option for locating medical device manufacturing operations. The location allows for cost-effective manufacturing, while still retaining access to consumer markets in the U.S. and support operations north of the border. For example, Essilor, an international lens manufacturer announced a 500-job expansion in its Tijuana facility last summer. While a large portion of that country’s medical device industry is located in and near Tijuana, projects examining potential sites in Mexico should also look for opportunities further into the country, especially as labor markets near Tijuana tighten.