Recent published findings from the 2018 PA Manufacturing Scorecard prove that Pennsylvania’s manufacturing industry’s economy is strong and growing, performing better in some areas than national trends. Moreover, these findings also underscore the work of Pennsylvania’s Industrial Resource Centers (IRCs), seven nonprofits strategically located throughout the Commonwealth of Pennsylvania that for more than 30 years have served as the state’s lead economic development organizations. The IRCs provide support and services to the small to mid-sized manufacturers that make up more than 92% of the state’s manufacturing base, enabling them to grow, thrive, and continue to be vital and productive contributors to Pennsylvania’s economy.
“The results of the 2018 PA Manufacturing Scorecard confirm that the statewide work of the IRC Network is a driving and powerful economic force,” said Eric J. Esoda, CPA, IRC Network Board Chair and President & CEO, Northeast Pennsylvania Industrial Resource Center (NEPIRC). “Our small to mid-sized manufacturers make up the majority of PA’s manufacturing base. The challenges posed by changing markets, new and disruptive technologies, the workforce skills gap, and the competitive pressure of today’s global economy can all be daunting for these manufacturers. That’s why the IRC Network focuses on this critical manufacturing group to empower them with the tools, strategies, and support they need to capitalize on opportunities, compete more effectively, and fuel our state and national economies.”
The IRCs specialize in providing technical assistance to the manufacturing sector throughout Pennsylvania’s 67 counties by assisting companies with improved bottom line strategies, productivity enhancement and waste elimination, and with topline growth by supporting strategic initiatives, new and improved products, market differentiation and workforce development strategies. Funded through the PA Department of Community & Economic Development, the IRCs are also one of three key programs that make up Governor Tom Wolf’s Manufacturing PA Initiative, a plan to enhance the growth and competitiveness of manufacturing PA companies by fostering strategic partnerships and training-to-career pathways.
PA Economic Indicator Results
The PA Manufacturing Scorecard 2018 indicates that Pennsylvania is the 8th largest manufacturing state in the country based on gross domestic product (GDP), the market value of all final goods and services produced by manufacturers in an economy. In 2017, PA manufacturers generated more than $88 billion in GDP.
While Pennsylvania ranks 8th in the nation among states’ contribution to GDP, it is competing with much larger, more populated states, such as California and Texas that typically hold the #1 and #2 ranking. Pennsylvania is also keeping up with neighboring states, including Ohio, Illinois, and Indiana, and yet is outpacing New York.
In the last 10 years, Pennsylvania experienced an increase of 17.5% in manufacturing GDP, whereas U.S. manufacturing experienced an increase of 34.9% over the same time period. However, in recent years, Pennsylvania has outperformed the nation’s manufacturing GDP growth, marking a 10.3% increase to the U.S.’s 9.4% between 2013 and 2017 and 5.0% to 4.5% between 2016 and 2017.
For Jim Futrell, Jr., CCR, Vice President – Market Research & Analysis of the Allegheny Conference on Community Development, this data is compelling. Mr. Futrell, on behalf of the IRC Network conducted the analysis for the 2018 PA Manufacturing Scorecard from economic reports from the U.S. Bureau of Economic Analysis, the U.S. Bureau of Labor Statistics, and the U.S. Department of Commerce.
“What the data indicate is that Pennsylvania is well positioned as it competes with other neighboring states and those that are historically identified as part of the ‘Industrial Heartland’ states for their sustained economic reliance on manufacturing,” explained Mr. Futrell. “It also demonstrates that the manufacturing industry within Pennsylvania remains a vital and dominant economic sector, disproving the broad misconception that manufacturing is dead in Pennsylvania, as well as the U.S. For Pennsylvania manufacturers, the benefit of having access to the extensive resources and business expertise of a central conveying organization like the IRC Network is invaluable.”
One of the biggest changes facing small to mid-sized manufacturers today is the emergence of Industry 4.0, a term referencing the fourth industrial revolution. At its most basic, Industry 4.0 involves optimizing the third industrial revolution’s integration of computers and making them “smart.”
Coincidentally, Industry 4.0 principles, technologies, and processes are directly tied to two of the biggest challenges facing the economic performance of the state’s small to mid-sized manufacturers: making ongoing continuous improvements and identifying growth opportunities. Often these manufacturers lack the in-house expertise to pursue or deploy these principles and technologies.
The IRC Network is at the forefront of the Industry 4.0 movement, offering its clients a full breadth of services to understand and implement the new technologies, including autonomous robotics, additive manufacturing and 3D printing, Internet of Things, Cloud computing, cybersecurity, big data and analytics, simulation, and horizontal/vertical software integration. Every one of the seven IRCs has industry experts specifically trained on innovation processes to teach manufacturers to use the tools at their disposal.
In regard to the 2018 PA Manufacturing Scorecard results on employment and wages, Pennsylvania has 14,414 manufacturing establishments with more than 561,700 manufacturing employees, ranking the state as the 6th largest employment base for manufacturing among all 50 states. Moreover, these manufacturing employees also account for almost 10% of the total state workforce.
The leading Pennsylvania manufacturing industries in 2017 contributing to the total manufacturing employment in the state were fabricated metal product manufacturing with 80,125 employees (14.3%), food manufacturing with 71,622 (12.7%), machinery manufacturing with 43,628 (7.8%), and chemical manufacturing with 40,165 (7.2%). Rounding out the top 5 is primary metal manufacturing with 34,938 employees (6.2%), a figure that is more than double the national average. Additionally, the annual wage of a manufacturing employee in Pennsylvania in 2017 grew by 2.2% to $61,111, which is 13.2% higher than the average Pennsylvania wage of $54,000.
For Pennsylvania manufacturers, the IRC Network is committed to building a world class workforce for the 21st century and has a proven track record in job creation and retention. IRCs facilitate employer engagement and provide career awareness and workplace learning opportunities through a five-step methodology that links to universities and students, advances incumbent workers, develops industry-driven curriculum, builds the pipeline and links with K-12 schools, and finally, builds overall career awareness.
David L. Bonvenuto, CEO of Oberg Industries, a manufacturing company based in Freeport, Pa., characterized his organization’s ongoing experience with the IRC Network as not only an incredibly positive one, but also one that has yielded a significant return on investment. “As a client of the IRC Network for 10 years, they have an excellent grasp of the challenges and the opportunities that small to mid-sized manufactures in our region face,” said Mr. Bonvenuto. “The IRC Network is a unique organization and a wonderful resource for Pennsylvania manufacturers. They excel at helping their clients develop the strategies needed to enhance manufacturing operations whether it’s related to product, process, and/or people and bring about the best solutions. I’m extremely satisfied with the results that our collaboration with the IRCs has produced. Oberg Industries has achieved very consistent growth in sales, growth in employment, greater participation in our apprenticeship program, and gains in productivity—all positive business metrics that have a significant impact on our state economy.”
Mr. Bonvenuto’s testimonial underscores the outcomes that most IRC clients experience. In fact, in fiscal year 2017-2018 alone, IRC clients achieved increased sales that generated $185 million in increased demand for Pennsylvania manufactured products and services. During this same timeframe, IRCs also helped to create and retain more than 5,100 jobs.
From business opportunities and innovations to process improvement and workforce development and training, there’s little Pennsylvania’s IRCs can’t do to support Pennsylvania manufacturers’ needs for growth. For more information on the 2018 PA Manufacturing Scorecard, visit pamade.org/manufacturing-reports/. If you are interested in working with PA’s IRC Network, visit pamade.org to find the IRC nearest you.
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About the Industrial Resource Center (IRC) Network
The IRC Network represents seven private nonprofits strategically located throughout the Commonwealth that play a critical role in helping Pennsylvania manufacturing continue to thrive. Working collaboratively, company by company, the IRCs provide the expertise, tools, and services that enable manufacturers to respond to changing markets, new technology, and the competitive pressures of today’s global economy. The IRC Network is funded through the PA Department of Community & Economic Development. For more information about the IRC Network, visit pamade.org.
About the PA Department of Community & Economic Development
The Department of Community and Economic Development’s mission is to encourage the shared prosperity of all Pennsylvanians by supporting good stewardship and sustainable development initiatives across our commonwealth. With a keen eye toward diversity and inclusiveness, we act as advisors and advocates, providing strategic technical assistance, training, and financial resources to help our communities and industries flourish. For more information, visit dced.pa.gov.
About the Allegheny Conference on Community Development
The Allegheny Conference on Community Development and its Affiliates – the Greater Pittsburgh Chamber of Commerce, the Pennsylvania Economy League of Greater Pittsburgh, and the Pittsburgh Regional Alliance – work in collaboration with public and private sector partners improving the economy and the quality of life in southwestern Pennsylvania. These partners and their organizations comprise the Regional Investors Council, which provides time, talent and resources to define opportunities and challenges, identify solutions to these issues and mobilize the public, private and non-profit sectors to achieve results in the 10-county Pittsburgh region. The current 2018-2019 agenda, Creating a Next Generation Economy for All, focuses on growing the economy and improving competitiveness. For more information, visit alleghenyconference.org.
About Oberg Industries
Headquartered just north of Pittsburgh, Pa., Oberg Industries is a diversified manufacturer with over 900 employees worldwide specializing in the production of advanced, precision machined or stamped metal components and precision tooling. Oberg’s global manufacturing footprint includes operations in Pennsylvania, Illinois, and Costa Rica. Each manufacturing facility is ISO certified and operates under one or more of the following standards: ISO 9001:2015, ISO 13485:2003, and AS 9100:2009 Rev. D. Oberg is a strategic contract manufacturing partner for companies in the aerospace, automotive, consumer/industrial products, defense, energy, construction and housing, medical device, metal packaging and munitions markets. For more information, visit the company’s website at oberg.com.