Job growth flat in 2006

When the national economy dipped into recession in late 2001, the state lost 51,000 manufacturing jobs, more than any other state.

But in southwest Missouri, the industry remains one of the largest sectors of the economy – the Springfield metropolitan statistical area employs 17,700 in manufacturing positions, according to the U.S. Bureau of Labor Statistics. Manufacturing is the sixth-largest employment sector for the Springfield MSA, behind education and health services (34,300), retail (25,600), government (24,900), leisure and hospitality (18,800) and professional and business services (18,200).

Of the 12 major sectors of the Springfield MSA’s economy, however, manufacturing was one of the three that posted no employment growth from 2005 to 2006, according to BLS.

Manufacturing employment shrank by 0.6 percent during that period, second only to a 6.6 percent drop in information technology employment to 4,300 and followed by retail, which was unchanged at 25,600.

International competition is one factor behind manufacturing’s stagnant employment figures.

Particularly, U.S. manufacturers face cost pressures not seen by many of their foreign competitors, paying, on average, 32 percent more to manufacture goods, according to Rita Needham, executive director of the Southwest Area Manufacturers Association.

“That’s not wages,” Needham said. “That’s taxes, cost of energy, health care, government regulations and frivolous lawsuits that we face here that they don’t in other countries.”

Cost pressure also comes from rising petroleum prices, particularly for plastics manufacturers.

“When the price of petroleum goes up, that makes their production costs higher,” she said. “Then, it’s cheaper for an international competitor to pick up their business.”

Training

While Needham said that manufacturing has always had a good work force with a strong work ethic, finding qualified workers remains a challenge for all manufacturers. Some of that, she said, comes from perceptions among students and adults, who have an undesirable opinion of the industry.

Local schools such as Ozarks Technical Community College are working to meet staffing needs. OTC offers training for several manufacturing sectors, including

industrial electronics, welding, machine tooling and drafting, according to Terry Troxell, the school’s dean of technical education.

Troxell said OTC is seeking state approval to develop a two-year manufacturing degree with multiple options.

For all industries, Troxell said determining training needs is a challenge for the school, which frequently gets calls from individuals and businesses asking about the availability of certain types of programs. The school works to add the programs that are needed most, such as the construction readiness program launched earlier this year.

The most-asked-about program is welding, for which OTC has two general options. The master welding program, a 20-week intensive course, saw 30 graduates last year, and Troxell said the school should graduate twice that many in the 2007-08 school year. The school’s less intensive, two-year program also features several courses each semester with about 20 students each.

Troxell said that while the school offers little welding training for aluminum or stainless steel, he hopes to expand those offerings next spring. “We don’t do a lot of that right now, but it’s a big field in the Springfield area,” he said.

Matt Detelich, president and CEO of Springfield-based stainless-steel fabricator Paul Mueller Co., can relate to the need for specialized welding training. His company currently as about 80 unfilled welder positions.

Troxell said that OTC also works on keeping its programs as current as possible through advisory committees comprised of representatives from the school and community businesses.

Leading the way

Needham said the industry is led locally by several old manufacturing standards, which is in line with data from the Missouri Economic Research and Information Center. MERIC shows more than 100 metal fabrication companies in the Springfield/Branson region.

“We have such a large amount of stainless steel fabrication in this area,” Needham said. “I’ve been told that there’s more stainless steel delivered to the Springfield area than anywhere else in the United States. And Paul Mueller started it – they were the original stainless steel manufacturers here.”

Paul Mueller Co., founded in 1940, employs more than 1,100 in its Springfield facility. Detelich said that the company’s growth and success has led to other companies cropping up in the area, both to help supply Paul Mueller and also to compete. But that, Detelich said, isn’t necessarily a negative.

“There have been some spin-off companies, so there are some additional resources available that we can tap,” he said. “We’re using local companies to supplement our growth, through subcontracting for some strategic components.”

Besides metal work, Needham said the local manufacturing economy is driven by a handful of large manufacturers, such as Kraft, Willow Brook Foods and 3M. Those three companies alone, according to information from the Springfield Business Development Corp., employ nearly 2,000 workers.

The influence of those companies, however, goes beyond their sheer numbers.

“We have large companies, but a lot of the smaller companies help supplement and support what the larger companies are doing, acting as suppliers and what not,” Needham said. “They are intertwined to some extent, and they all support each other.”

SAMA defines manufacturer as any company that “adds value to materials or semi-finished products … so that the final product … has a greater value than it had prior to the work being performed.”

“Look at Positronic,” Needham said, referring to the Springfield-based manufacturer of electronic connectors. “They make the connector, from the raw material clear through the finished product, but that’s not something the consumer is going to buy. It goes on an aircraft for the control panel, or in a piece of medical scanning equipment. People wouldn’t necessarily identify Positronic with their product, but it’s there.”

Behind the Pack

The Springfield area’s employment sector growth from 2005–06, in order of highest percentage growth (total employment in parentheses)

Professional and Business Services – 13.8 percent (18,200 employees)

Construction and Mining – 9.5 percent (10,400 employees)

Wholesale Trade – 5.1 percent (10,400 employees)

Government – 2.9 percent (24,900 employees)

Financial Activities – 2.5 percent (12,100 employees)

Leisure and Hospitality – 2.2 percent (18,800 employees)

Transportation and Utilities – 2 percent (10,200 employees)

Education and Health Services – 1.5 percent (34,300 employees)

Other Services – 1.2 percent (8.500 employees

Retail Trade – no change (25,600 employees)

Manufacturing – 0.6 percent loss (17,700 employees)

Information Technology – 6.6 percent loss (4,300 employees)

Source: U.S. Bureau of Labor Statistics[[In-content Ad]]