Manufacturing poised for promising future, Northeastern University study says

By Jay Fitzgerald | Boston.com | September 13, 2012

After decades of losing factory and assembly line jobs, manufacturing is poised for a promising future in Massachusetts, thanks to corporate investments in cutting-edge technologies and skilled workers who are churning out high-end products faster and cheaper than ever here, a new study says.

Employment in the sector has stabilized since the last recession and production is at its highest level in a decade, according to the study from Northeastern University released Thursday. Overall, manufacturing employment in the state is still expected to decrease, largely due to automation and increased productivity, but the declines will be nowhere near as steep as over the past 20 years.

Even so, some companies within “advanced manufacturing,” the segment of the industry that makes highly sophisticated products for the aerospace, computer, chemical, pharmaceutical, and other sectors, could expand payrolls and global market shares, the report said.

Some firms may even bring manufacturing jobs previously outsourced to other countries back to Massachusetts as customers demand higher quality work they can’t get elsewhere, the report said.

“Manufacturing in Massachusetts has survived the Great Recession and, if anything, appears to be in a better position today than in 2007 to prosper in the future,” the authors wrote in the report, called “Staying Power II: A Report Card on Manufacturing in Massachusetts 2012.”

Key findings of the report include:

– The overall productivity at the state’s 7,500 manufacturing companies has increased at an 8.7 percent 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 percent of the state’s economic output. Last year, the value of manufactured products rose to 12.2 percent of total goods and services produced in the state, up from 10. 8 percent 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.

– 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.

Barry Bluestone, the lead researcher on the study and director of the Dukakis Center for Urban and Regional Studies at Northeastern, said he wasn’t expecting to find manufacturing in such good shape, considering its historical downward trend and the severity of the recent recession.

“I’m incredibly encouraged and surprised,” said Bluestone. “Manufacturing has performed pretty darn well over the past few years.”

Michael Tamasi, chief executive of AccuRounds Inc., a precision manufacturer in Avon, said he hopes the public – and young workers and policymakers – realize that manufacturing has a future in Massachusetts. The report was to be formally unveiled at AccuRounds Thursday.

“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.

Tamasi noted that AccuRounds’ revenues have tripled to $11 million and its workforce has doubled to 71 over the past 10 years, due to increased business, some from European and US firms that previously outsourced work to other countries. “They realize we can do it better,” said Tamasi.

Michael Goodman, chairman of the Department of Public Policy at the University of Massachusetts-Dartmouth, said he’s encouraged by the report’s findings, which he said are consistent with manufacturing trends across the country..

“Even though some people say, ‘We don’t make things anymore in this country,’ that’s simply not accurate,” said Goodman. “We just produce goods with fewer people today. This is a story about technological advancement and having more skilled workers.”

But he cautioned that Bay State manufacturing won’t prosper if future workers aren’t trained well and early enough. “Our workforce-development and education sectors have their work cut out for them.”

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