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Pennsylvania manufacturing is still on the decline

Posted by IndustryNet on Friday, October 6, 2017

100000118PennsylvaniaManufacturingDeclineAccording to new industry data released this week by MNI, Pennsylvania lost manufacturing jobs for a fifth straight year as the state continues to face challenges on a number of fronts.

This post will take a look at some major Pennsylvania industries and how they fared over the year, as well as delve into city, county and regional data. We’ll also examine the general outlook for the state, and take a look at the impact some Trump Administration policies may have on Pennsylvania industries like coal and steel.

Pennsylvania’s long struggle with manufacturing declines

MNI, compiler and publisher of the industrial information that powers IndustryNet, reports Pennsylvania industries shed 8,604 manufacturing jobs from June 2016 to June 2017, a 1.1% decline.

This represents a somewhat sharper loss that MNI recorded in Pennsylvania for the 2015-2016 survey period, in which the state shed 5,500 jobs, but is generally in line with a steady decrease in industrial employment the state has experienced since 2012.

During the recession, Pennsylvania was one of the hardest-hit states in the nation, shedding nearly 100,000 jobs during the downturn, according to MNI data. Prior to that, industrial employment in the Keystone State was already losing jobs in response to multiple factors, including automation and a sharp increase in global competition largely attributed to NAFTA.

Employment stabilized somewhat in the years directly following the recession, helped by gains in oil and related industries as the fracking boom took hold. As oil prices rose, however, employment in those industries began to decline.PennsylvaniaManufacturing

In addition, a strengthening dollar made exports more expensive, and the glut of imported steel continued to drag down the state’s steel producers. High business costs and lagging infrastructure discouraged new investments.

Over the course of the past five years, Pennsylvania’s industrial sector has shed an additional 26,000 jobs, according to MNI data. Philadelphia accounted for a significant portion of these losses, with employment plummeting 19% or by 8,332 jobs since June 2012.

MNI’s business migration data shows roughly 20% of those lost jobs were due to Philadelphia manufacturers relocating to other parts of the state, and 60% from Philadelphia businesses leaving the state altogether.

Looking ahead

Despite these challenges, Pennsylvania has made great strides at fostering innovation and cultivating a workforce with the skills needed for today’s advanced manufacturing. Private/public partnerships like the Innovative Manufacturers’ Center have helped hundreds of Pennsylvania manufacturers innovate and drive growth over the years.

In addition, the recent designation of non-profit American Robotics, Inc. as an advanced robotics manufacturing innovation hub by the Department of Defense will help bring together universities, community colleges, manufacturers and non-profits to help usher in a new era of advanced robotics manufacturing.

Pennsylvania is also attracting manufacturers and fueling expansions with the abundance of capital funding available to businesses, along with numerous other incentives.

Policy changes may revitalize struggling industries

Even the state’s ailing coal industry received some good news over the year when Corsa Coal Corp. announced it had established a new metallurgical coal mining operation in Acosta. Although this was celebrated by the Trump Administration as evidence its deregulation policies were working, the new plant had actually been in the works years prior to Trump taking office.

Corsa executives, however, point to a general optimism that has surfaced in the coal industry due to Trump policies, signaling there may be a rebound in coal in the years ahead.

Pennsylvania’s long-suffering steel industry may also catch a break, with the recent approval of some major U.S. pipeline projects, which, along with the administration’s declaration that all steel used in these projects must be American-made, should help boost the state's steel producers.

Innovation_Batteries_HighTechBy the numbers

Losses were widespread across Pennsylvania’s industrial sector over the past year, and were sharpest in printing/publishing and transportation equipment, each declining 6%. Textiles/apparel, stone/clay/glass and electronics also posted significant losses. Oil/gas extraction, which had served to stabilize employment in the years directly following the recession, fell by 5%.

The industrial machinery sector, which employs the most factory workers in Pennsylvania, reported a loss of 2%.

Numerous plant closures in Pennsylvania were announced over the year, including a Kraft Heinz factory in Upper Macungie Township; several Allegheny Technologies facilities across the state; modular home builder Excel Homes in Liverpool; Quad Graphics in York; and a Merck facility in North Wales.

Employment losses were widely distributed across Pennsylvania’s five regions, with declines most severe in Southwest Pennsylvania. Taking a look at cities, MNI’s data shows many top industrial cities in Pennsylvania posted losses, Manufacturing employment in Philadelphia shrank 5.6% over the year,

Losses were also recorded in Lancaster, Erie, and Reading. Pittsburgh, which ranks second in the state for industrial jobs, saw little change in its industrial employment over the past year.

The top five

Here’s a look at Pennsylvania’s top industries based on number of jobs:

12% Industrial machinery and equipment
11% Food and kindred products
11% Fabricated metal products
9%  Chemicals and allied products
7%  Rubber and miscellaneous plastic products

The following are Pennsylvania’s top five cities for number of manufacturing jobs:

1. Philadelphia - 44,098
2. Pittsburgh - 39,759
3. York - 22,214
4. Erie - 18,980
5. Lancaster - 17,533

Pennsylvania’s top five counties by number of manufacturing jobs account for 18% of the state’s industrial workforce. Here are the top five:

1. Philadelphia - 44,098
2. Pittsburgh - 39,759
3. York - 22,214
4. Erie - 18,980
5. Lancaster - 17,533

Pennsylvania is home to some major industrial names. Here are the state’s top five companies by number of manufacturing jobs:

1. Merck & Co., Inc. (West Point) - 9,500
2. East Penn Mfg. Co., Inc. (Lyon Station) - 7,000
3. Boeing Defense, Space & Security (Ridley Park) - 5,200
4. Siemens Healthcare (Malvern) - 5,000
5. Endo Pharmaceuticals, Inc. (Malvern) - 4,566

For more information on Pennsylania manufacturers

MNI’s extensive manufacturing data powers IndustryNet, an industrial marketplace that connects buyers with suppliers. IndustryNet allows users to search and source more than ten thousand types of products, parts, supplies, and services for free. IndustryNet® lists every U.S. manufacturer plus thousands of wholesalers & distributors and industrial service providers. To connect with industrial suppliers in Pennsylvania and across the U.S. start your free search on IndustryNet. Or, to access detailed profiles of Pennsylvania’s 16,000 industrial companies and their 51,000 executives, learn more about the EZ Select manufacturers database subscription.

Want to keep up with the latest industrial procurement & sourcing trends and exclusive statistics from MNI? Industry professionals trust the free weekly IndustryNet Insider email as their go-to source for industrial news & statistics you can't find anywhere else. Subscribe here.




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