Steady improvement in manufacturing productivity could signal economic progress in 2014, advocates say, but investment in training is what’s needed most to propel the industry forward.
Total manufacturing hours improved for 10 months of 2013, compared with 2012, according to University of Rhode Island economist Leonard Lardaro’s Current Conditions Index. Percentage increases ranged from 0.4 to 3.8 percent – data that – given Rhode Island’s tie for the highest unemployment rate in the nation with Nevada at 9 percent – surprised Lardaro.
The index broadly measures momentum in the economy from month to month and year over year. Manufacturing hours, just one of 12 indicators, reflect the total number of hours worked as opposed to the number of employment positions, or jobs.
Since those hours worked have grown after falling precipitously during the recession, employees have returned to a more normal workweek, “so manufacturing has actually come back a bit,” Lardaro said in late December.
“Everything I’m hearing through the grapevine, everybody seems to be more positive, more optimistic, showing modest signs of improvement,” agreed Bill McCourt, executive director of the Rhode Island Manufacturing Association. “By and large, what people are seeing is gradual improvement. They’re starting to feel a little bit better, but there’s still a long way to go.”
There are an estimated 2,000 manufacturers in the state, according to McCourt.
Lardaro offered some context when evaluating the positive news: 1984 was the last year that manufacturing employment increased in Rhode Island. And the third quarter of 1987 was the last time Rhode Island actually functioned as a manufacturing-based economy.
“That’s the problem,” he explained: “We’ve been post-manufacturing for 26 years. It’s less forgiving than a manufacturing-based economy.”
Nonetheless, he added, with manufacturing hours on the rise, manufacturing output also has increased, and that’s good news – as far as it goes. As more sophisticated manufacturing equipment reduces the number of people needed to operate machinery and causes layoffs, it also requires new training that is not always available, which prevents companies from hiring and expanding, he said.
McCourt wants to counter this trend, and address seemingly small but pertinent issues that his members and other manufacturers believe have been holding back the industry. Coordination of training with high schools and the Community College of Rhode Island, coupled with more capital to put toward such programs, would show commitment to the industry, he said.