Factories add 197,000 jobs, reviving manufacturing
St. Louis Post-Dispatch
May 29, 2011
By David Nicklaus
The death of American manufacturing turns out to have been greatly exaggerated.
Indeed, U.S. factories have added 197,000 workers in the past year, representing nearly one of every six jobs created in this slow-moving recovery. Metro St. Louis has gained 3,400 manufacturing jobs in the past year.
Those numbers end a couple of long losing streaks. Until late last year, St. Louis hadn't posted a year-over-year gain in manufacturing jobs in any month since September 1998. Nationally, manufacturing employment hadn't grown since mid-2000.
Around the metro area, the good news has come in large and small doses. U.S. Steel's Granite City Works, which was idled for part of 2008 and 2009, was back to 2,200 workers by the end of last year. General Motors in Wentzville has added 62 workers in the past year and Schattdecor, a German company, opened a Maryland Heights plant in February with 50 employees.
At U.S. Steel and GM, the job gains represent workers being recalled as demand picks up. What makes this recovery look especially promising, though, is a phenomenon known as reshoring.
Reshoring means the return of domestic manufacturing in industries that had largely gone overseas. It's helped by a weaker dollar, which helps U.S.-made products compete on price.
Schattdecor, which prints designs used in laminated furniture, flooring and countertops, has had a U.S. sales office for 15 years but did all of its manufacturing in Europe and Asia. General Manager Tom Drazen says his domestic plant can fill orders faster and compete in fashion-oriented parts of the furniture industry.
Without the new plant, he says, "We were going to hit the wall and not be able to grow further with most of our customers."
St. Louis, Drazen says, is "logistically perfect" for a company that ships to all corners of the U.S., and it has workers who know the industry. He and several other employees once worked for Orchard Decorative Products, a Crestwood specialty printer that was sold in the 1990s and later shut down.
Drazen says Schattdecor expects to double the plant's employment, to about 100, within a year.
He's not the only factory manager dusting off a help-wanted sign. ConocoPhillips' refinery in Wood River expects to add 50 full-time jobs late this year when an expansion goes online. And Thiel Tool, a 50-employee auto parts maker in St. Louis, just obtained financing that may enable it to add between 30 and 50 jobs, president Michele Thiel said.
The $3.2 million loan comes from Advantage Capital, an investment firm that's funded partly by state and federal tax credits. Traditional banks, Thiel said, consider the auto parts industry too risky.
The recent gains, as encouraging as they are, need to be put in perspective. As a percentage of total U.S. employment, manufacturing has been declining for a century.
The decline gained speed in the late 1990s, partly because of a strong U.S. dollar and partly because of China's entry into the world trading system. In the past decade, the U.S. lost 5 million manufacturing jobs, including 61,200 in St. Louis.
"Maybe what we're seeing now is that the incredible rate of decline is coming to an end," says Bill Emmons, an economist at the Federal Reserve Bank of St. Louis.
"These are the best numbers we have seen in a long time. But in the context of such massive losses before, it's hard to say how much of it is a cyclical bounce and how much is a pause in the longer-term trend."
In other words, it's too early to know whether the gains will last. In a sector that's been beaten up for so long, though, even a pause in the decline counts as good news.
