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Report Details Impact of Energy Sector on Region
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WASHINGTON -- Inexpensive natural gas will boost manufacturing growth in the United States and its metropolitan areas, according to a new report released by the U.S. Conference of Mayors and prepared by IHS Global Insight. The report details the impact on 100 MSAs including Youngstown-Warren-Boardman-Mercer County, Pa.
The report details the impact the energy sector has had on manufacturing in the MSAs since 2010 and shows how the new availability of inexpensive natural gas has ignited the steel, iron, fabricated metals and machinery manufacturing industries as well as those of plastic, rubber, resin and organic chemicals. Also included are projections for expected employment and sales from 2012 to 2020.
"We believe the energy revolution is helping the U.S. regain its footing in the manufacturing sector," said Virg Bernero, mayor of Lansing, Mich., and chairman of the U.S. Conference of Mayors Advanced Manufacturing Task Force. "Most of these manufacturing jobs will occur in our cities and their metropolitan regions, which we know are the drivers of the national economy."
The report provides employment and sales growth for nine manufacturing industries including fabricated metals, machinery and plastics that are energy-intensive. It also forecasts expected employment and sales from 2012 to 2020 in the top 100 metro areas, all 363 metro areas combined, and nationally, for the nine manufacturing sectors.
2012 figures and projections from the Youngstown-Warren-Boardman-Mercer County, Pa., MSA are as follows (all dollar figures are in millions, employment figures are in the thousands):
Basic organic chemical manufacturing (the local MSA is ranked 90th out of 100):
Employment 2012: 14
Employment 2020: 16
Average annual change: 1.7%
Real gross sales 2012: $11.9
Real gross sales 2020: $22.9
Average annual change: 8.5%
Iron & Steel Mills (ranked 8th):
Employment 2012: 2,009
Employment 2020: 2,132
Average annual change: 0.7%
Real gross sales 2012: $1,500
Real gross sales 2020: $1,977.1
Average annual change: 3.5%
Fabricated metals (ranked 47th)
Employment 2012: 5,314
Employment 2020: 6,121
Average annual change: 1.8%
Real gross sales 2012: $1,192
Real gross sales 2020: $1,475
Average annual change: 2.7%
Machinery manufacturing (ranked 70th)
Employment 2012: 1,982
Employment 2020: 2,011
Average annual change: 0.2%
Real gross sales 2012: $520.1
Real gross sales 2020: $670
Average annual change: 3.2%
Nonmetallic mineral manufacturing (ranked 73rd)
Employment 2012: 774
Employment 2020: 710
Average annual change: -1.1%
Real gross sales 2012: $183.5
Real gross sales 2020: $221.7
Average annual change: 2.4%
Resin, rubber and fiber manufacturing (ranked 77th):
Employment 2012: 34
Employment 2020: 12
Average annual change: -12.2%
Real gross sales 2012: $32.5
Real gross sales 2020: $13.8
Average annual change: -10.2%
Plastics and rubber products manufacturing (ranked 68th)
Employment 2012: 1,211
Employment 2020: 1,056
Average annual change: -1.7%
Real gross sales 2012: $361.6
Real gross sales 2020: $384.1
Average annual change: 0.8%
Agricultural chemical manufacturing (ranked 81st)
Employment 2012: 8
Employment 2020: 11
Average annual change: 4.1%
Real gross sales 2012: $5.9
Real gross sales 2020: $11
Average annual change: 8.1%
Petroleum & coal manufacturing (ranked 72nd)
Employment 2012: 53
Employment 2020: 57
Average annual change: 0.9%
Real gross sales 2012: $47.2
Real gross sales 2020: $63.8
Average annual change: 3.8%
"This report underscores that the manufacturing sector has been critical in helping the national economy rebound from the recession, especially in metropolitan areas," said Neil O'Leary, mayor of Waterbury, Conn., and vice chairman of the task force. "The energy-intensive industry, in particular, has been a key component in the manufacturing expansion and has played a key role in the country's overall economic recovery. We are energized to see that employment in this area will continue to grow, which means new jobs locally for residents in our cities."
Other key findings of the manufacturing report:
- Over the last three years, metro area manufacturing employment has expanded at an average annual rate of 1.7%. Energy-intensive industry, in particular, has been a key component in manufacturing expansion.
- Through 2020, the report projects that energy-intensive manufacturing employment will expand more than 1% annually nationwide, with 72% of those jobs coming in metro areas.
- From 2010 to 2012, energy-intensive manufacturing sectors added more than 196,000 jobs and increased real sales by $124 billion in the MSAs. In 2012, metro economies accounted for more than 78% of the total employment and 82% of the real sales in energy intensive manufacturing industries.
- Expanded demand for new pipelines and mining equipment has resulted in a 17% increase in real sales and a 9.7% increase in employment (2011-2012) in steel, iron, fabricated materials and machinery manufacturing in metro areas.
- The increased availability of natural gas and oil led to a surge in plastic, rubber, resin and chemical manufacturing, resulting in these industries increasing their employment by 2.6% within metro areas.
The Chicago MSA leads the fabricated-metals sector with 64,536 jobs in 2012, slated to grow to 75,757 jobs in 2020, or a 2% average annual growth rate. The sector's annual sales growth rate is projected to be 2.8% nationally through 2020.
The Houston metro leads employment in machinery manufacturing with 53,377 jobs in 2012, projected to grow to 69,591 jobs by 2020. Nationally, the sector is expected to see 3.7% increase in sales through 2020.
Chicago had the highest level of employment among MSAs in iron and steel (18,911 jobs); fabricated metals (64,536 jobs); nonmetallic mineral manufacturing (8,816 jobs); and plastics and rubber products manufacturing (29,468 jobs). Houston led employment in organic chemical manufacturing (20,225 jobs); machinery manufacturing (53,377 jobs); resin, rubber and fiber manufacturing (4,473 jobs); and petroleum and coal manufacturing (10,229 jobs). Baton Rouge, La., led in agricultural chemical manufacturing (1,944 jobs).
The United States Conference of Mayors is the official non-partisan organization of the nearly 1,400 cities with populations of 30,000 and more.
Published by The Business Journal, Youngstown, Ohio.
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