CFL News
February 25, 2013

Manufacturing jobs growing faster in Chicago than U.S., study finds

A study by the University of Illinois at Chicago shows that Chicago's manufacturing sector outpaced the rest of the country in growth over the last year

Source: Crain's Chicago Business
Video: http://bcove.me/t4zbcv3v

By Meribah Knight

The number of manufacturing jobs in the Chicago area grew faster during the past three years than in the nation overall, according to a new study by the University of Illinois at Chicago's Center for Urban Economic Development.

From 2010 through the third quarter of 2012, manufacturing employment grew 5 percent in the metropolitan area compared with 4 percent nationally. During the previous decade, the country had lost manufacturing jobs.

The study also found that "moderately high-technology" industries such as transportation equipment, auto machinery, electrical equipment and appliances, those whose production jobs don't necessarily require a four-year degree, are growing faster in the Chicago area than around the nation. On the other hand, high technology industries including pharmaceuticals, computers and electronics, often touted as the future of manufacturing in the U.S., are losing jobs in the region.

“I think we need to be realistic even as we are being aspirational. We need to build off of what we have,” said the study's author, Howard Wial. He is executive director at the Center for Urban Economic Development and a Brookings Institution fellow.

The study, which used data from Moody's Analytics supplemented with data from the Illinois Department of Employment Security, analyzed 14 counties spanning Illinois, Indiana and Wisconsin. In Illinois, they include Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry and Will counties. The study covered Jasper, Lake, Newton and Porter counties in Indiana and Kenosha County in Wisconsin.

According to the report, 47 percent of the metropolitan area's manufacturing jobs are located in Cook County with much of that in suburban Cook. The largest manufacturing sectors in the area are fabricated metal products, which makes up 16 percent of the area's manufacturing jobs with about 66,000 positions, and food manufacturing, which comprises 12 percent of all manufacturing jobs in the area with about 48,000 positions. In the city of Chicago, which has about 65,000 manufacturing jobs, food manufacturing is the largest sector, with 26 percent of the city's manufacturing jobs, the study showed.

In 2011, the Chicago metro area had about 411,000 manufacturing jobs, second only to Los Angeles. Since 2010 the region has gained about 20,000 manufacturing jobs, Mr. Wial said.

Despite the recent job growth, the number of manufacturing jobs in the Chicago area remained 29 percent lower than it was in 2001, with about 185,000 fewer jobs in 2011 than in 2001. Between 2001 and 2010, the metropolitan area lost 32 percent of its manufacturing jobs compared with the nation's loss of 30 percent over the same period, the study said.

On average, Chicago-area manufacturing salaries exceeded the U.S. manufacturing average of $60,340 by 10 percent. Salaries in the region's manufacturing sector, $67,168 on average, were about 16 percent higher than the $56,579 average earnings for all jobs in the metropolitan area.

Mr. Wial said that embracing high-skilled manufacturing might be good for cities like San Jose, Calif., and Seattle, but Chicago is better off sticking to what it does well and innovating products and production within its moderately high-tech industries rather than luring new high-tech businesses.

“We don't want to promote a zero-sum competition between regions in the U.S. If we want to focus on advanced manufacturing, as we should, I think the moderately high-tech industries are a good place to start,” Mr. Wial said.

According to the study, manufacturing companies' locations — ideally in clusters close to cities and resources — are critical to productivity, higher wages and future job growth. Mr. Wial said the trend toward decentralization, as companies moved into the suburbs, is worrisome.

“When companies are clustered together it tends to attract the kind of skilled labor force that they need and attract the suppliers that they do business with,” he said.

 



Read more: http://www.chicagobusiness.com/article/20130225/NEWS05/130229912/manufacturing-jobs-growing-faster-in-chicago-than-u-s-study-finds#ixzz2LwdZ6PW1 

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