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TeamNEO: Manufacturing productivity to increase
By Kalea Hall
YOUNGSTOWN
We are doing more with less people.
That’s the story behind Team NEO’s latest quarterly Economic Indicator report released today .
The report focuses on manufacturing and points out how Northeast Ohio’s productivity in manufacturing continues to grow, but how manufacturers produce their goods has changed.
“Manufacturing still matters a lot, but we have diversified,” said Jacob Duritsky, vice president of strategy and research for Team NEO.
Team NEO is an economic development organization based in Cleveland that focuses on creating jobs for the 18-county Northeast Ohio region. Representing the Youngstown-Warren area is the Youngstown/Warren Regional Chamber. The Columbiana County Port Authority represents that county.
From 1990 to 2015, Northeast Ohio’s manufacturing productivity increased 92 percent and is expected to increase another 73 percent by 2025, according to the report.
“More productivity means more income and more production,” said Mekael Teshome, PNC Bank economist. “The downside is we don’t need as many workers for it. Over time, manufacturers have figured out ways to be more productive.”
Technology is what has led these companies to be more productive. As technology enhanced, manufacturers found ways to produce more at a faster rate.
While manufacturing isn’t seeing a lot of job growth, there’s expected to be job openings after the older generations of workers retire, the report says.
The region’s makeup of traded – or export – industry sectors has seen a dramatic change from 1970 to 2015. In 1970, manufacturing accounted for 58 percent of traded sectors compared with 26 percent in 2015.
In the U.S., manufacturing accounts for 18 percent of traded sectors.
Health care was less than 10 percent of traded sectors and was nearly 30 percent in 2015 in Northeast Ohio.
“The region has turned into a health care hub,” Teshome said.
The top 15 Northeast Ohio sectors in manufacturing include motor-vehicle parts, plastics and machine shops. When comparing 1970 to 2015, the report shows a shift from traditional manufacturing at steel mills and foundries to advanced manufacturing at plastics companies and machine shops.
The sectors with the highest growth expected between 2015 and 2025 are computer and peripheral equipment manufacturing, with an anticipated growth of 104 percent, and electronic component manufacturing with anticipated growth of 89 percent.
Overall, the Youngstown/Warren Metro Statistical Area has 1,000 manufacturers with 30,000 employees. On average, the manufacturing employees make $57,000 a year, according to the Youngstown/Warren Regional Chamber.
“Really, our regional economy is in a transition,” Teshome said. “Manufacturing will continue to play a major role; it just looks different and works different.”