Report: Mass. Manufacturing Sector Stabilizes; Shift Seen Toward High Tech
Jobs losses in manufacturing stabilized over the past three years, according to a new report, and even though the economic sector is expected to continue shrinking through 2016 public officials remain optimistic about the potential for growth in high tech manufacturing fields.
The report, titled “Staying Power II: A Report Card on Manufacturing in Massachusetts 2012” and prepared by Northeastern University researcher Barry Bluestone and the Center for Urban and Regional Policy, found that job losses accelerated during the recession, but employment in manufacturing has leveled out since September 2009.
The number of manufacturing firms in Massachusetts actually increased in 2011 by 43 for the first time since at least 2002, and possibility as far back as the 1970s, according to the report.
“We’re happy to see that Professor Bluestone has done the analysis and confirmed what the governor and I have been seeing around the state that our manufacturers have done a great job of reinventing themselves in Massachusetts,” Secretary of Economic Development Greg Bialecki said.
The findings of the report were detailed Thursday morning at an event hosted by the Boston Foundation, the Massachusetts High Technology Council and others at AccuRounds in Avon. Gov. Deval Patrick, Lt. Gov. Timothy Murray, Bialecki and several manufacturing executive attended.
Patrick announced a new initiative to promote manufacturing that includes $5 million in state funding to improve workforce competitiveness and create workshops to promote awareness of capital and technical assistance for companies. Murray also launched “AMP It Up!,” a new statewide careers promotional campaign to increase awareness about job opportunities within the industry.
According to the report, the manufacturing industry had been shrinking by nearly 15,000 jobs a year between 2000 and 2006, putting it on a path toward extinction by 2025. Then the recession hit in 2008 and manufacturing jobs quickly plummeted from 291,000 in January 2008 to 252,700 in September 2009.
Since that time, however, employment numbers stabilized and currently there are approximately 250,400 people employed in manufacturing in Massachusetts, according to the report.
Bialecki said the industry has shifted away from traditional manufacturing of goods like footwear, paper and plastic products to high tech products used to support clean energy and biotechnology advancements.
“What this shows is that because the industry has reinvented itself we can have a competitive advantage. It’s not just about the cost. It takes a lot of skill. Not everyone can make the things we’re making now,” Bialecki said.
Still, the Northeastern University study found employment will continue to shrink due to further increases in productivity by about 2,000 jobs a year for the next six years, leaving close to 239,000 manufacturing jobs in the state in 2018.
By 2017, 70 percent of manufacturing firms are expected to increase the size of their workforce with 13 percent estimating they could grow their workforces by 25 percent or more, 22 percent expecting an increase of 11 percent to 24 percent in employment and only 5 percent of firms expecting to downsize five years from now.
The percentage of high-tech manufacturing jobs has increased from 19.8 percent in 1970 to 31.2 percent in 2010, according to the report. Over 20 percent of jobs now require at least a bachelor’s degree.
The “work ethic” of the workforce and the difficulty of relocating were listed by firms as the top two reasons for continuing to do business in Massachusetts, while the cost of health care, workers’ compensation and taxes and fees were named as the top three reasons firms might leave the state.
Despite 40 percent of manufacturers reporting difficulty finding skilled craftsmen, the availability of a skilled workforce was the last of 10 reasons listed for looking elsewhere to relocate a business.
Still, Bialecki said training the next generation of manufacturing laborers remains one of the state’s biggest economic development and education challenges.
“We have not had enough young people going into manufacturing so the age of our workforce is high and growing,” Bialecki said. “Of those 250,000 working now, there will be a lot of retirements and attrition in the coming decades and that means we’ll need tens of thousands to go into manufacturing.”
The Patrick administration has made a concerted effort to start repurposing part of the mission of the state’s community colleges to meet the needs of emerging workforces, including biotechnology, life sciences and high tech manufacturing.
Bialecki said the administration has already directed additional funding to North Shore Community College to add a manufacturing program, and Springfield Technical Community College and Holyoke Community College are in line in 2013 to receive additional funding to expand their programs.
Boston Foundation President Paul Grogan called it “one of the most disturbing concerns revealed” by the report that only one in eight manufacturing firms consider the state’s community colleges to be a training ground for their future workforce.