Report: Factory jobs fall, but output is higher than ever
Large-scale job cuts in manufacturing, including those in recent months at York County's Harley-Davidson Inc. factory, often grab headlines.
Despite that, all is not doom and gloom in the country's manufacturing sector, an Indiana business professor says.
U.S. manufacturing and logistics industries, despite public perception, in fact experienced dramatic growth over the past generation in at least one metric, says a new report from Professor Michael Hicks at Ball State University.
U.S. manufacturing production grew 11 percent since the dot-com bust of 2000-03 and the ensuing economic turbulence of the 2001 and 2007-09 recessions, according to Hicks.
The director of Ball State's Center for Business and Economic Research and a professor of economics and business research, Hicks this week released a report, "Manufacturing and Logistics: A Generation of Volatility & Growth," spotlighting the positive trends.
"According to folklore, this has been a terrible generation for manufacturing and those who move goods," Hicks said.
"That isn’t really what the data says. Indeed, 2015 was a record manufacturing production year in inflation-adjusted dollars," he continued. “While 2016 fell just short with some weakness in the first and second quarter, 2017 looks to be a new record year."
One local manufacturing expert said the Indiana report is spot-on, and applies to Pennsylvania as well as other parts of the U.S.
"Contrary to common misperceptions, manufacturing output is greater than ever, and this has been achieved with fewer workers," said John Lloyd, president and CEO of Mantec Inc., a York-based nonprofit consulting firm that provides assistance to the manufacturing sector.
The increase in productivity has come about through better workforce training and education, lean manufacturing techniques, increased use of technology and greater automation, Lloyd said.
And it has increased American global competitiveness, creating greater demand for U.S. products, he said.
Hicks noted that most of the confusion about tough times in manufacturing and logistics is due to declining employment over the past generation: "The fact is, manufacturing firms have become very lean, and productivity growth means more goods produced with fewer workers."
According to a news release describing the Ball State report, three factors contribute to a decline in employment: the workforce is better educated and trained, increasing productivity; mechanization displaces workers; and improved processes, such as "Lean Six Sigma" and other management methods, increase manufacturing production.
But just in York County, some manufacturers have recently announced job cuts.
Harley-Davidson in April announced it would eliminate roughly 118 jobs at its factory in Springettsbury Township, as it consolidates production of its Cruiser line of motorcycles to a plant in Kansas City, Mo. The shift will add 118 jobs in Kansas City.
And Kelvion, which makes heat exchangers, also had announced in April its plans to close its East Manchester Township manufacturing plant. Seventy-two people will lose their jobs, with the cuts to begin June 30, it was announced.
Since peak manufacturing employment in 1979, the U.S. has lost some 7.5 million manufacturing jobs but has gained more than 9 million jobs in trade, transportation and utilities, the broadest measure of the logistics industry, the news release about the Ball State report noted.
"Trade and productivity growth shifts job opportunities to other places and other sectors, even as employment grows," Hicks said. "We are at peak U.S. employment right now."
For more, visit the Ball State business center website here.