The CONNSTEP Blog
The Winter 2013 issue of The Connecticut Economy was released last week. The Connecticut Economy is a quarterly journal published by the University of Connecticut’s Department of Economics that offers data, forecasts, and substantive, data-driven analyses of current events, longer-term trends, and public policies affecting Connecticut’s economy. In this quarter’s journal, UCONN economist, Steven Lanza, issues Connecticut a manufacturing report card that highlights the industry as a vital contributor to the state’s economic present and a key role in its future.
Although the industry has experienced a steep jobs decline, from 477,000 or about one-third of total jobs in 1969 to just 174,000 or less than ten percent of total jobs in 2011, according to U.S. Bureau of Economic Analysis data, there are signs of stabilization. For the past two years manufacturing jobs have remained steady at about 165,000.
Despite the jobs decline the sector continues to make significant contributions to the state’s economy. In the last decade, Lanza estimates, manufacturing accounted for twenty percent of the growth in the state’s economic output, while at the same time, boosting productivity. The value of manufactured goods per worker increased by more than fifty percent from 1990 to 2007 with thirty-five percent fewer workers.
Productivity per worker rose from $57,900 to $135,800 during the same time frame, an impressive 134 percent increase. The remarkable productivity growth has translated into high earnings for industry employees. Annual earnings among Connecticut factory workers averaged $76,900 in 2011, 26 percent above the state’s all-industry average of $61,100. The increased earnings go hand in hand with the industry’s technological advancements. As manufacturers require more sophisticated machines and computers, they also require a highly trained and skilled work force to operate them.
Connecticut manufacturers are radically different from those of yesteryear. Today, high-tech firms produce more than 70 percent of the state’s output, with computer/electric products and chemicals accounting for more than 13 percent and 30 percent, of the total output in 2010. Connecticut has also become a leader in the aerospace and defense-related transportation equipment field – the sector produced 23 percent of industry output in the same year. Also different from manufacturers of the past is the size of today’s manufacturer, the majority of Connecticut manufacturers are small to mid-sized, and most manufacturing workers are employed by these more modest enterprises.
So how does Connecticut stack up to the rest of the nation? According to Lanza’s index, “Connecticut ranks sixth, behind Oregon, Indiana, Wisconsin, Massachusetts, and Louisiana, with a score of 91, a solid A-.” According to Lanza, “Connecticut owes its high mark to impressive scores in employee compensation and concentration in technological sophistication. These attribute offer promise that the manufacturing industry will continue to be a cornerstone of the state’s economy in the 21st century.”
The Winter 2013 issue is available online at: http://cteconomy.uconn.edu/TCE_Issues/Winter_2013.pdf.