Manufacturing is expected to be one of the big drivers of U.S. economic growth over the next 10 years. Its share of output in GDP is projected to increase from 12.7 percent in 2013 to 13.7 percent in 2023. However, manufacturing employment will decline by more than half a million jobs between 2012 and 2022, according to the Bureau of Labor Statistics (BLS). Dan Levine of Oxford Economics, explains this paradox .
According to Levine, many low-skilled, labor-intensive industries will remain highly vulnerable to continued offshoring and automation, but even fast-growing advanced manufacturing industries will show modest employment declines. So how can manufacturing drive economic growth? It has one of the highest economic multipliers of any industry — i.e., each $1 of manufacturing investment results in $1.33 of “spillover” economic activity. I would add that technological advances will continue to eliminate in many industries as 3D printing and other technologies take hold.
Additionally, Levine contends that BLS employment numbers for manufacturing may not be entirely accurate because of the large number of contract or contingent workers employed at manufacturing plants. A 2014 study by Arden Partners notes that 87 percent of those companies that use contingent labor say they do so for projects that require specified, top-tier skills, and 61 percent cite the general “war for talent” as a reason for using contingent labor. And I will add that contingent labor is also used because companies want assurances that workers are drug-free and it is a way to hold down wages and benefits.
Manufacturing reality in Ashtabula County is that it represents one-third of the county’s economic output ($1.04 billion of $3.34 billion), which has decreased somewhat over the past decade, but manufacturing’s economic contribution is MANY times larger than Agriculture, Tourism, or any other industry sector represented in the county. The county lost 2,100 manufacturing jobs in 2004-2013 (from 8,650 to 6,545), which is a 24.3% loss over the decade.