OHIO Manufacturing sector is stabilizing, economists say

The state's percentage of manufacturing jobs has dropped to 15 percent.
COLUMBUS (AP) -- After losing nearly 200,000 jobs since 2000 to cheaper foreign labor and new technology that makes companies more productive, recent economic reports suggest that Ohio's manufacturing sector may be starting to stabilize.
"It looks like we hit the low point in December 2003 and basically have been plateauing ever since," said Richard J. DeKaser, National City Corp.'s chief economist. "What we're experiencing now is a cyclical rise in manufacturing activity of sufficient magnitude to require job creation. The prospect for some modest gains is good."
The number of manufacturing jobs in Ohio has fallen to 822,000 as of July, according to the Ohio Department of Job and Family Services. The percentage of manufacturing workers in Ohio has fallen about four percentage points since 1994 to 15.4 percent, National City said.
DeKaser said he is not looking for the creation of new plants with a large number of workers. Instead, he said most new jobs will be created at existing operations.
In Chillicothe, for example, Kenworth Truck Co. is adding 212 jobs at an average salary of $38,615 to the 1,500 it already has there. Most of the new manufacturing jobs, though, figure to come from smaller companies adding workers to their staff of 30 to 50 people.
Higher level of skills
Allen Miller, professor of industrial welding and systems engineering at Ohio State University, said the manufacturing jobs the state is keeping generally require sophisticated equipment and skills.
"The lower the level of technology required to make the product the more likely it will not be produced here," he said.
Miller believes small manufacturers, such as Evans Adhesive Corp. of Columbus, will be the future for Ohio's manufacturing sector.
The 104-year-old, 50-worker company has managed to stay in business among much bigger glue makers by targeting companies such as vegetable-box makers and billboard companies.
"We find the niche markets," said Rusty Thompson, Evans chief executive. "In the U.S., you've got the big guys looking for the big customers. What's left open for us are the family-run companies."
Despite declines in unemployment, output is near record levels because of improved productivity. Manufacturing, which contributes $80 billion to Ohio's economy, also contributes to growth in businesses that support it.
Key sector
Amy Hanauer, executive director of the research group Policy Matters Ohio, said manufacturing always will play a key role in Ohio.
"It may continue to shrink, but it has shown that it stabilizes at various times in our history," she said.
She said the key to keeping the industry viable is emphasizing post-secondary education and training to compete for higher-end manufacturing.
"Our local and state economic development spending often fails to consider the quality of the jobs that will be created when we give out tax abatements and other incentives," she said.