1 / 28

Project Focus

Project Focus. Bill Testa Vice President and Director of Regional Programs April 27, 2004. Project Focus:. 1. Are we losing our manufacturing base? 2. In light of the past 3 years, are we now losing our manufacturing base (more rapidly?)

mahle
Download Presentation

Project Focus

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Project Focus Bill Testa Vice President and Director of Regional Programs April 27, 2004

  2. Project Focus: • 1. Are we losing our manufacturing base? • 2. In light of the past 3 years, are we now losing our manufacturing base (more rapidly?) • 3. Is manufacturing shifting out of the Midwest to other regions?

  3. Are we losing manufacturing?

  4. Much like the nation, Midwest mfg. output climbs with little or no growth in labor

  5. Strong productivity growth allowed manufacturing output to grow faster than the overall economy

  6. This has decreased manufacturing’s share of total jobs while increasing service jobs

  7. Is the recent manufacturing decline here to stay?

  8. Not necessarily: Mfg. peaks and valleys are typically magnified

  9. Manufacturing jobs are volatile; downturnsoften stretch longer than recessions….

  10. Is manufacturing shifting awayfrom the Midwest?

  11. We are looking back to see the top of the hill, but we are still near the summit...

  12. ...and not to be written off so easily.

  13. And this is not your father’s Midwest manufacturing downturn v. the U.S.

  14. Are we measuring manufacturing activities consistently over time?

  15. U.S. Manufacturing and Services • The manufacturing “process” increasingly uses more services--both (1) inside the factory gate, and (2) purchased from outside • These changes--especially “outside service purchases”: (1) overstate the trend losses of “manufacturing” jobs, and (2) understate the observed cyclical swings

  16. Inside the factory gate, non-production workers are displacing production workers

  17. The reasons are not clear.... • Labor-saving productivity higher for blue-collar? • Industry mix & new products an unknown • Production operations of U.S. manufacturing companies may be increasingly sited overseas, but serviced from here

  18. Purchased services

  19. U.S. manufacturers have also been purchasing more services from “outside the factory gate”

  20. Peter Drucker exhorted businesses to “sell the mailroom” during the late 1980s….they were already doing so, and continue to do so today

  21. Production + services has not declined so dramatically as production alone….especially in the Midwest

  22. Though important, this does not negate the long-term (nominal) decline of manufacturing in the Midwest

  23. Manufacturers also buy “services” in the form of workers from the Temporary Help Supply industry….this may distort both trend and cycle

  24. Though still a small share of total employment,temp jobs have increased rapidly

  25. Temp jobs in manufacturing have grown even faster; especially during the 1990s...

  26. …so that temps make up an increasingshare of manufacturing payrolls

  27. Since temps are “first-fired” and perhaps “first-hired,” data may have understated the downturn and recovery

  28. At end…. • Much as in other sectors, manufacturing is becoming a service occupation…. • Skill-bias technical change may be one reason; “unbundling” for another reason; and possibly off-shoring of labor-intensive industries • Unbundling of service functions may mean that we overestimate manufacturing job decline over time… • Cyclical behavior may also be misread using payroll data

More Related