The key to Ohio’s economic recovery might be the same sector that hastened its decline: manufacturing.
There are signs that the state’s manufacturers are beginning to hire again. The same thing is happening in the country as a whole, and economists are voicing new optimism that the bleeding has almost stopped.
Automakers are leading the way, prompting a trickle-down effect for parts suppliers, steel processors and many other businesses.
Evidence of this was on display last month in Lordstown, where General Motors said it soon would resume the third shift at the assembly plant, adding 1,200 jobs. The announcement, attended by state and local political leaders, had a party atmosphere.
“I think it’s a big deal,” said Peter T. Ward, chairman of the Department of Management Sciences at Ohio State University. “We’re kind of getting back to that normalcy.”
Gov. Ted Strickland agrees. “The chips were down, but we never gave up,” he said, speaking at the Lordstown event.
This month, the Federal Reserve Bank of Cleveland said that manufacturers were reporting stable-to-rising production.
“In general, our contacts are cautiously optimistic in their outlook,” the bank said in its Beige Book, a summary of regional economic conditions. “Although no end market is particularly strong, rising volume was attributed primarily to defense and energy. Our steel contacts are hopeful that improving conditions will continue.”
State leaders also expect to gain jobs from manufacturing related to clean energy. In January, DuPont said it was expanding its Circleville plant to produce a new resin that will be used in solar panels, a gain of 80jobs.
“The bottom line is about jobs,” said U.S. Rep. Steve Austria, R-Beavercreek, speaking at DuPont.
The deeper issue is the inclination toward intense cyclical shifts in Ohio’s job market, leading to deep downturns followed by the relief of recovery, Ward said.
“The bad news about Ohio’s economy is it is dependent on manufacturing and particularly on manufacturing in sectors that get clobbered cyclically,” he said.
The long-term decline is undeniable. In 1990, 22percent of the state’s jobs were in manufacturing, said the Ohio Department of Job and Family Services. Now, after a loss of more than 400,000 jobs, the share is down to 12percent.
In 2009 alone, the loss was 93,600 jobs. Most were in durable-goods manufacturing, the production of heavy-duty items such as cars and refrigerators.
Many of those jobs will never come back, as companies use more automation and other tools to do the same job with fewer people.
“Those industries have changed,” said Brian Harter, spokesman for the state jobs office. “They have been forced to change and they’ve had to learn the hard way to do more with less.”
In the short term, though, the situation clearly is improving. From December to January, the state gained 5,300 manufacturing jobs, the second consecutive month of gains.
The turnaround began in July, when the state gained 1,900 manufacturing jobs. That followed a period of staggering losses, peaking with the loss of 25,900 jobs in January 2009.
But it is probably too soon to declare a new trend. Just last month, the state lost 6,000 manufacturing jobs, bringing employment in the sector down to 607,500.
“Are we really seeing a trend or is it just a few puffs of smoke?” Ward asked.
All he can say for sure is that the anecdotal evidence is encouraging. At some point, the anecdotes – such as the GM announcement – will turn into actual jobs. And that’s when the recovery will be here.
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Article courtesy dispatch.com