Manufacturing isn’t dead in Northeast Ohio, but instead grew and added new jobs last year, according to data and figures released by two regional economics agencies.
The third-annual Northeast Ohio Manufacturing Survey by the Manufacturing Advocacy and Growth Network, or MAGNET, and Team NEO on the 2019 State of Manufacturing, came to the following conclusions:
- Worth $41 billion, manufacturing makes up 20 percent of Northeast Ohio’s Gross Regional Product.
- Regional exports top $87 billion annually.
- The chemical subsector in the region is worth $7 billion.
- Oil and gas averages the highest output per worker, contributing more than $630,000 each to the annual Gross Regional Product.
- There are more than 264,000 manufacturing workers in the region, with more than 21,000 open manufacturing positions every year.
The region’s Gross Regional Product is expected to reach $238.5 billion when final figures for 2018 are released. The survey, released last week, represented November through January, with the vast majority of responding companies being small: 53 percent had less than $10 million in 2018 revenue, and 40 percent earned between $11 million and $99 million.
Total manufacturing employment in Northeast Ohio was at 1.947 million workers, a number that has increased by nearly 9,000 jobs year over year, with a concurrent 1 percent decrease in unemployment. Northeast Ohio’s unemployment rate averaged 5 percent for the second quarter of 2018, the report concluded.
Manufacturing added 5,500 jobs from the second quarter of 2017 to the second quarter of 2018. And despite the loss of more than 200,000 manufacturing jobs in the past several decades, productivity grew more than 90 percent between 1990 and 2015.
The largest output came from the chemical, fabricated metal and transportation equipment sectors, worth more than $6 billion each to the Gross Regional Product. Metal fabrication alone employs more than 50,000 Northeast Ohio workers.
Tops in exports were the transportation equipment industry, at $16 billion in exports — products made in Northeast Ohio but sold outside the region. That was followed by chemicals ($14 billion) and fabricated metals ($11 billion).
The survey took information from 500 manufacturing companies that responded to the third annual Ohio Manufacturing Survey.
According to survey results:
- Sixty-eight percent of respondents said their company grew revenues in 2018, and 77 percent of respondents expect their revenues to grow in 2019.
- Automation is not replacing jobs, but rather increasing worker productivity, with just 6 percent of respondents reporting they use automation to replace current workers.
There also were concerns and challenges: Cybersecurity remains a “growing concern” for manufacturers, with 62 percent saying they are concerned and 2 percent reporting they have been attacked online.
Manufacturers also cited attracting new, skilled workers as a challenge. Sixty percent of respondents said their growth has been hampered by the lack of skilled workers. Another 378 respondents, or 64 percent, said tariffs are hurting them, with 13 percent reported the tariffs affected their company positively.
“We are encouraged by the growth of the Ohio Manufacturing Survey, which continues to give us powerful insights into the state of manufacturing in Ohio,” said Ethan Karp, president and CEO of MAGNET. “We tremendously appreciate the partnership of our collaborating organizations, the financial contributions of our corporate sponsors, and of course the time and energy of the manufacturing respondents who make this possible.”
“Moving forward, the rapid changes in manufacturing we’re beginning to see now will likely result in higher wages and increased productivity,” said William Koehler, CEO of Team NEO. “We expect these improvements to lead to increases in demand for our products, opportunities for a diverse workforce and the strengthening of our region’s global competitiveness.”