Overview of a factory at work
Felipe Dupouy
A recent study that found a net positive gain in U.S. manufacturing jobs for the first time in decades could spell a brighter future for places like western Pennsylvania, with its uptick in natural gas production and a burgeoning technology boom.
According to the Reshoring Initiative 2016 Data Report, reshoring and foreign direct investment by companies that have returned U.S. production or sourcing from offshore brought 77,000 new jobs last year; since 2010, 338,000 jobs have been brought back to the U.S.
Overview of a factory at work
Felipe Dupouy
Reshoring and FDI together were up more than 10 percent in 2016, with similar trajectories reflected in preliminary data from January, according to the report.
David Taylor, president of the Pennsylvania Manufacturers’ Association, said Pennsylvania has seen similar success in building its manufacturing jobs base — the manufacturing output in Pennsylvania increased to $86 billion in 2016, up from $82 billion the year before. Taylor attributes the increase to several factors, including the shale gas boom, noting that in western Pennsylvania in particular, the ethane that is extracted has more additives in it than that of other regions in the state, providing feedstocks for a range of manufacturing.
“This is a great reason for businesses to locate in Pennsylvania, to be closer to these feedstocks; this is what we’re fighting for, and while we’ve seen encouraging signs, we’re looking forward to federal regulatory relief and buildout of the energy infrastructure to connect that Pennsylvania energy production’s valuable byproducts to Pennsylvania factories that can use it,” he said.
Taylor also noted that Pittsburgh’s technology sector, with players like Carnegie Mellon University, Uber Technologies Inc. and others, would likely further contribute to a need for more manufacturing jobs in the region. Ilana Diamond, managing director of AlphaLab Gear, Innovation Works’ hardware startup accelerator, said the incubator has spent years pushing its young companies toward local manufacturing partners.
“Over the past four years at AlphaLab Gear, we’ve seen the financial and logistical advantages of having our startups work directly with regional and other domestic manufacturers to learn from their expertise,” she said. “There is enormous benefit to the startup that gains a knowledgeable, accessible partner and the U.S. manufacturer that opens up new customer channels to growing businesses.”
According to the U.S. Bureau of Labor Statistics, Pennsylvania currently has a little over 500,000 manufacturing jobs, but Taylor noted that the indirect impact of those jobs is millions more, in supply chains and distribution networks, as well as industrial services jobs.
“Manufacturing has the strongest multiplier effect on jobs, and we should remember all those other jobs sustained by that core manufacturing activity, in addition to what are on the floor,” he said.
Lydia Nuzum covers health care, technology and education for the Pittsburgh Business Times.
