Manufacturing is finally gaining ground

Pasadena Star News

By: Cynthia Kurtz

Posted: 6/18/2014 

We keep hearing good economic news. The Ports of Long Beach and Los Angeles are busy. Developers are once again eyeing properties that have lain dormant for years. The Bureau of Labor Statistics confirmed last month that total nonfarm payroll employment has finally surpassed its pre-recession peak. There is even evidence of manufacturers expanding and adding jobs. 

The story of the decline in the number of manufacturing jobs is well known. It is not unique to the San Gabriel Valley nor to California. Across the U.S. manufacturing jobs began to decline in the 1980's. "Made in America" products became harder to find.

The San Gabriel Valley experience was repeated in regions across the country. In 2001 there were 94,000 manufacturing jobs in the SGV. Since 2000, the SGV has lost over 35,000 jobs in manufacturing resulting in an employment low of 58,175 in 2012.

The decline was not caused by a single event or because of a single reason. There were many simultaneously causes, each contributing to the rapid decline. Fewer regulations and cheap labor enticed many companies to move production facilities to other countries. Demand for products tanked as the housing market as well as other consumer spending sectors declined dramatically during the recession. Manufacturers began taking advantage of technology to increase productivity resulting in equal or higher output requiring fewer employees.

Last year economists began to report data suggesting that manufacturers would soon need to expand and hire workers. The manufacturing capacity utilization rate - which measures the percentage of actual output compared to potential output - reached a post-recession high. Severe weather constrained production in early 2014 but the May 2014 economic data released recently showed consumers are now releasing pent up demand.

The San Gabriel Valley is sharing in the manufacturing boom. For the first time in decades, manufacturing jobs increased in 2013. The SGV added 725 new manufacturing jobs. Economists predict that 2014 will show additional gains.

The region has experienced job expansion in several key manufacturing areas. Fabricated metal products manufacturing; resin, rubber and artificial fiber products; aerospace and parts manufacturing; and electrical equipment and components manufacturing - all businesses which serve the aerospace industry in Southern California - have posted job gains.

Pharmaceutical and medical manufacturing has also added jobs fueled by the strong healthcare sector in the San Gabriel Valley.

Californian's love of Asian and Mexican foods as well as an expanding demand around the globe for foods that are produced under the tight health regulations adhered to in the U.S. has resulted in new hiring in SGV food processing firms.

No one is predicting the return to the high employment numbers that manufacturing claimed in past decades but the growth of these specialized and high tech manufacturing jobs is welcome news.