Manufacturing Has a Healthy Future in Massachusetts as sector Stabilizes and Sees Growth
MFR Tech | September 16, 2012
“Manufacturing is alive and well in Massachusetts, and has a healthy future,” Professor Barry Bluestone of Northeastern University told more than 200 industry and policy leaders, including Gov. Deval Patrick and Lt. Gov. Timothy Murray, as he unveiled a new report, Staying Power II: A Report Card on Manufacturing in Massachusetts. The findings of the report were detailed Thursday morning at an event at precision manufacturer AccuRounds in Avon.
Bluestone heads Northeastern’s Dukakis Center for Urban and Regional Policy, which produced the report with support from The Greater Boston Manufacturing Partnership (GBMP), the Mass Tech Collaborative, RBS Citizens and The Boston Foundation.
The study is based on a survey of 700 companies across the state and updates an earlier version that used data gathered before the economy fell into recession. Massachusetts manufacturing, Bluestone noted, “ïf anything, appears to be in a better position today than in 2007 to prosper in the future.”
Jobs losses in manufacturing stabilized over the past three years, according to the 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.
Some Key Findings About Massachusetts Manufacturing
- Despite its image as a vanishing segment of the state’s economy, manufacturing remains the sixth largest industry employer in Massachusetts, ahead of financial services, wholesale trade, construction, state government, and information services.
- The average annual pay of a manufacturing worker is about $75,000. In terms of payroll for employees, manufacturing is the second largest industry in the state, after health care.
- 65% of the 700 manufacturers surveyed expect to increase production over the next five years;
- The number of manufacturing firms in Massachusetts increased in 2011 by 43 for the first time in decades;
- Most Massachusetts manufacturing companies are small (72% have fewer than 20 employees), and most (again, 72%) are family-owned;
- Although most jobs in manufacturing are now “white collar,” only about one position in five requires a college degree
- Although manufacturers may consider leaving Massachusetts because of cost issues, the survey found that the skills and work ethic of the state’s workforce are powerful reasons to stay.
- The overall productivity at the state’s 7,500 manufacturing companies has increased at an 8.7% annualized clip over the past five years, far faster than in other sectors in Massachusetts. The report attributes the gains to investments by companies in manufacturing robotics, machinery and equipment, and in training employees.
- Even though manufacturing accounts for 8 percent of employment, it is responsible for more than 12% of the state’s economic output. Last year, the value of manufactured products rose to 12.2% of total goods and services produced in the state, up from 10.8% in 2009;
- Massachusetts manufacturers shed 50,000 jobs during the recent economic downturn, but the rate of decline was much smaller than in past recessions. Employment stabilized after 2009 at about 250,000 jobs;
- As many as 100,000 manufacturing jobs could open for younger workers over the next several years as baby boomers retire;
Looking ahead, Bluestone reported, 65% of manufacturing firms expect to see higher production levels in Massachusetts in five years, and 70% forsee expansion of employment in the state. These very encouraging results can be realized, he said, only by facing up to the recruitment challenge by working proactively with educational institutions and training organizations, and promoting manufacturing careers. Employers are already experiencing difficulty in hiring skilled workers, and an upcoming wave of retirements will create up to 100,000 job vacancies over the next 10 years.
This, he suggested, falls within the purview of the new Massachusetts Advanced Manufacturing Collaborative, an industry-led group from manufacturing, academia and government, with the mission to promote manufacturing, workforce training and education, technical assistance and innovation, access to capital, and controlling the costs of doing business.
“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 says.
Governor Deval Patrick agreed, saying, “Professor Bluestone has given us a great story to tell, and we have to tell it – together.”
However, despite all this positive news, several “clouds” hang over the sector, including health insurance and energy costs, and the ability to replace a rapidly aging workforce, though some say manufacturers should look more to community college graduates.
During the event, 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 among young people about job opportunities within the industry.
Michael Tamasi, President of AccuRounds, says AccuRounds competes internationally, and wins. He says the company has doubled employment and tripled revenue over the past ten years, despite the recent recession. Tamasi is planning to almost double the size of his manufacturing plant, add equipment and floor space, and he’s hiring machinists.
“This report shows that, if you’re good at what you do and you do it efficiently, you can compete globally,” said Tamasi, who also serves as chairman of the Greater Boston Manufacturing Partnership, a co-sponsor of the Northeastern report.