The manufacturing sector has bounced back in Rockford, Illinois, a former industrial powerhouse that was hit hard by layoffs and factory closings during the economic downturn.
After slashing workers and briefly shutting down amidst the financial crisis, the nearby Chrysler plant is back to 4,000 workers and suppliers that depend on the car business have ramped up hiring. The aerospace industry has also been driving employment gains in Rockford, a city about 150,000 near the Wisconsin border that is close to regaining the industrial jobs lost in the Great Recession.
“Manufacturing has been a major driver of reemployment,” said Janyce Fadden, president of the Rockford Area Economic Council. “The manufacturing sector really drives our economy. It brings money into the community – that’s how wealth happens.”
It’s stretch to call what’s happening in Rockford a manufacturing renaissance. The city has added manufacturing jobs in recent months, but remains economically depressed, with an unemployment rate near 12 percent. Unemployment has come down from nearly 20 percent in January 2010, but this is partly because workers have left town or stopped looking for jobs. And while local manufacturing firms have added back some jobs, employment in the sector remains far off from 2000 levels.
It’s the same story nationally. The American manufacturing sector shed about 2.6 million jobs in the economic downturn and has added back only about 530,000 jobs since February 2010, when employment in the sector bottomed out. Last month, just 8.85 percent of American workers were employed in the manufacturing sector, a historic low. Step back a bit further and the manufacturing sector is down 5.3 million jobs since April 2000.
*Source: U.S Department of Labor
The trade deficit, an important measure of how American companies are competing in the global marketplace, rose to $539 billion in 2012 after dropping under $400 billion in 2009, as Americans tightened their belts and reduced spending during the economic downturn. As the economy has improved, the trade deficit has shot back up.
*Source: U.S. Department of Commerce
Historically, manufacturing jobs have been key part of the nation’s economy, providing good salaries for workers with average or low levels of educational attainment. But increasingly, the jobs gains in America have come in low-wage industries. In April, the economy added 165,000 jobs, mostly in the retail and service industries. Manufacturing hiring remained flat in April, as industrial production slowed and factory orders slumped.
To be sure, American manufactures have made productivity gains in recent years, and challenges doing business abroad have made the United States more attractive to some industrial firms.
But while cheap natural has boosted manufacturers, a recent report from Morgan Stanley said the domestic energy boom has been overstated, with the gains limited to certain industries, like chemical production. Experts said the perception that American manufacturers are more competitive in the global economy has mostly been driven by the European recession and a slowing Chinese economy: relative to the struggles in other parts of the world, American manufacturers appear to be doing a bit better. But that’s a far cry from a true industrial resurgence, economists said.
“Certain parts of the country are coming back to life, but I would not call that a renaissance,” said Mikhail Melnik, an economics professor at Southern Polytechnic University. “China is losing some steam, but globally there are still pools of labor to compete against our labor force. The world is very big.”
Mobile, Alabama is the type of the place that observers point to when arguing for the American manufacturing renaissance. Last month, Airbus, the French aircraft maker, broke ground on a $600 million plant that is expected to employ 1,000 workers when the production line cranks up in 2015. Local officials hope the facility, the first in the United States for Airbus, will drive an aerospace boom across the Gulf Coast. In addition, cheap natural gas has buoyed Mobile manufacturers, with chemical producers and a Finnish steel operation taking advantage of the low-cost domestic energy source.
The manufacturing boom in Mobile is boosting housing prices and driving retail development, a local economic develop official said.
“We’re seeing it across the board,” said Troy Wayman, vice president of economic development at the Mobile Area Chamber of Commerce. “We’re on the right track as far as the revitalization of the manufacturing community.”
Mobile has added about 3,000 manufacturing jobs since 2009 and more workers there are employed in the sector than at any time since 2001. Still, in April, just 9.8 percent of the area’s workforce was in manufacturing. Back in 2001 that figure was closer to 11 percent and the number of Mobile workers employed in the leisure and hospitality industry has surged 18 percent in the last 12 years.
Manufacturing jobs aren’t likely to resurface in Kannapolis, North Carolina, where residents and officials are preparing to mark a grim anniversary. In July, it will 10 years since Pillowtex shuttered its textile factory there, eliminating more than 4,300 jobs in a single day and ravaging the economy in a traditional mill town with a manufacturing history dating back to the early 20th century. In 2010, Cabarrus County, where Kannapolis is located, also lost a Phillip Morris plant, which eliminated another 1,100 jobs. In 2011, 4,700 workers were employed in the manufacturing sector in Cabarrus County, fewer than worked at the two shuttered plants combined.
The economy there has pivoted. The area is home to several NASCAR teams and a a major mall that draws tourists from around the region. The former Pillowtex site has become a research campus, now employing about 300 workers, which local officials hope will drive the expansion of the burgeoning food processing industry in the area.
“They key to job creation is going to be the commercialization of that – drawing in companies that want the proximity to the research and the high-end equipment there,” said John Cox, president of the Cabarrus Economic Development Corporation. “We still try to recruit manufacturing firms, but I’d say our economy has changed from textiles and tobacco to technology and tourism.”
Rockford too has tried its hand at attracting tourists. After Forbes named Rockford the third most miserable city in the country this year, the Convention and Visitors Bureau produced a video called “Misery Loves Company” that touted Rockford’s minor league hockey team and the local speedway. This week, the Illinois Legislature passed a bill allowing Rockford to impose a 2 percent tax on hotel bills to help fund improvements to the city’s sports facilities.
Still, Fadden said drawing in new manufacturing jobs remains her top priority. A majority of the estimated 65,000 unemployed and underemployed workers in the Rockford area have manufacturing skills. And more jobs in the sector could help drive the unemployment rate under 10 percent for the first time since November 2008. Fadden, looking south to Mobile, hopes to convince some Airbus suppliers to relocate to the Midwest and expand Rockford’s aerospace industry.
“There’s not a plane flying in the word that doesn’t have a part from Rockford,” she said. “You’ll find a great supply chain here, which will lower costs, and a great workforce.”