Manufacturing growth locally is making more headway than it has in years, national and regional figures show, with U.S. industry ending the year with a strong showing that promises momentum for regional companies.
Manufacturing output in December increased at its fastest pace since March 2012, according to a report released Thursday by Markit, the global financial information company. Meanwhile, the Institute for Supply Management said its new orders index increased in December by 0.6 percentage point to 64.2 percent, its highest reading since April 2010 when it registered 65.1 percent.
Manufacturing here accounts for 17 percent of a 14-county Southwest Ohio region’s gross domestic product, approximately $11.5 billion of $67.1 billion in 2012. It employs more than 113,000 people or 14.5 percent of the total workforce. That makes it the largest private sector industry in the region.
“We had an unusually strong December in orders,” said Tom Hoge, President of Production Control Units, 2280 W. Dorothy Lane, in Moraine. The company, which employs 67 and designs and builds systems for handling industrial fluids and gases, has added 12 workers. Hoge said he expects 2014 to be a solid year with stronger conditions in 2015-17.
While manufacturing locally hasn’t caught up to an employment level that was 158,392 in 2001, it has logged more job gains recently than it has in many years.
From 2010 to 2013, strong gains have been posted in machinery with 2,795 jobs added; fabricated metal products, 1,519 jobs; food processing, 1,466 jobs; and transportation equipment, 1,245 jobs, figures from the Dayton Development Coalition show. Since 2010, local manufacturing has gained by nearly 7,000 jobs.
Figures from the Coalition show the area is making a particularly strong recovery in machinery manufacturing products that are exported internationally. In pre-recession 2008 those exports were worth $412 million. Exports for all of 2012 were worth substantially more at $445 million, according to the latest data.
“Companies that were exporting when the recession started fared better than those that did not. Exports bring new money into a region which can lead directly to new jobs,” said John Owen, the Coalition’s Advanced Data Analyst.
Markit also said a broad indicator of the health of the economy, the Purchasing Managers’ Index, rose to an 11-month high, indicating stronger confidence in business conditions. Employment growth hit a nine-month high and there was a strong increase in new orders.
PMI was measured at 55.0, up from 54.7 in November and above the earlier estimate of 54.4, Markit said, indicating “a solid rate of expansion.” Readings above 50 show the sector in expansion mode.
“The upturn in the PMI in December rounds off one of the strongest quarters for manufacturing since the economy pulled out of recession,” said Chris Williamson, chief economist at Markit.
“Most encouraging is the fact that growth is being led by rising demand for investment goods such as plant and machinery. This tells us that business spending is picking up on the back of rising confidence, which adds to the sense that the recovery is being more self-sustaining,” Williamson added.
Employment also continued to gain, taking the current sequence of job creation to six months, Markit said.
David Burrows, director of economic development programs for the Coalition, said he expects continued strength in the automobile supply chain and food manufacturing, among others. Honda has beefed up production and new facilities for Abbott Labs and White Castle show how the region is becoming attractive to the food industry.
There are ongoing discussions with global aircraft manufacturer Airbus, he added. “We are working to make sure our supply chain fits for the future of Airbus,” he said.
Of 18 manufacturing industries, 13 reported growth in December, the Institute for Supply Management, said.
Those are Furniture & Related Products; Plastics & Rubber Products; Textile Mills; Apparel, Leather & Allied Products; Computer & Electronic Products; Paper Products; Transportation Equipment; Primary Metals; Fabricated Metal Products; Wood Products; Printing & Related Support Activities; Food, Beverage & Tobacco Products; and Miscellaneous Manufacturing.
Four industries reporting contraction in December are: Nonmetallic Mineral Products; Machinery; Chemical Products; and Electrical Equipment, Appliances & Components.
Strongest gains in manufacturing employment in 14-county region from 2010 to 2013
Machinery: 2,795 jobs gained of 19,653 total.
Fabricated metal product: 1,519 jobs gained of 15,074 total.
Food: 1,466 jobs of 9,277 total.
Transportation equipment: 1,245 of 22,074 total.
Electrical equipment, appliance, components: 583 of 3,428 total.
Plastics and rubber products: 572 of 9,038 total.
In 2012, more than $35 billion in manufactured goods were exported from the 14-county region, according to the Dayton Development Coalition.
Source: Dayton Development Coalition.
By Steve Bennish - Dayton Daily News, Ohio (MCT)
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