You asked (1) how many fewer manufacturing jobs are there now in Connecticut compared to 10 years ago, (2) whether the rate of manufacturing job losses has increased in recent years, (3) what factors contribute to job loss, and (4) what are the trends in different manufacturing sectors.

SUMMARY

Connecticut, like many other states, has lost a considerable number of manufacturing jobs over the last 10 years. From 1994 to 2003, approximately 53,900 manufacturing jobs were lost.

The rate of such job losses has increased considerably over the last several years. From 1994 to 1998, the state lost 5,600 jobs. But from 1998 to 2001, manufacturing job losses jumped to 21,100; and from 2001 to 2003, the losses increased more quickly as the economy shed 27,200 more jobs. Economists see a number of factors contributing to this job erosion, including (1) manufacturing facilities moving out of state or choosing not to expand here due to high costs and (2) facilities using new technology to increase productivity, which frequently means it takes fewer people to produce the same amount of goods.

Jobs producing durable goods have been hit harder than those producing non-durable products. Durable goods jobs decreased 22. 6% during this period while jobs producing non-durable goods decreased

17. 3%. The chemical and pharmaceutical sector is the brightest spot in manufacturing – it is the sole sector that showed an increase in jobs (up 2. 9%) during this 10-year period.

Connecticut is losing manufacturing jobs at a slower rate than any of its neighboring states.

OVERALL MANUFACTURING TREND

Like virtually all of the older industrialized states, Connecticut has seen a steady erosion of its manufacturing jobs over the last 20 years. Chart 1 shows the figures for 1994 to 2003, during which time 53,900 manufacturing jobs were lost.

Chart 1: Connecticut Manufacturing Jobs

Today manufacturing employs 13% of the state’s workforce. In 1993, it employed 20% of the workforce.

During the 1990’s when the economy was creating a lot of new jobs, the decrease in manufacturing jobs was briefly reversed, 1998 actually saw a 2,500-jobs increase over 1997. That reversal stopped 12 straight years of declining manufacturing jobs. But the reversal was fleeting and manufacturing jobs began to drop even before the onset of the most recent recession in July 2000.

From the end of 2001 to the end of 2003, manufacturing accounted for 45% of the job losses in Connecticut. Connecticut manufacturing did a little better than the rest of the country during that same period when nationally 57% of all job losses came from manufacturing. Similarly, Connecticut over the last 10 years lost manufacturing jobs at a slower rate than any of its neighbors (See Table 1).

Table 1: Manufacturing Jobs Lost in Four States, 1994-2003

In general economists say, manufacturing jobs are hit hard during a recession. But often, for states like Connecticut with dense populations and many old manufacturing facilities, when the recession is over not enough new manufacturing jobs are created to replace the old ones that were lost.

As for the future, John Tirinzonie, an economist with the state Labor Department, expects Connecticut will lose about 20,000 more manufacturing jobs over the next 10 years. If this holds true, it would represent a continuing decline, but not as precipitous a drop as the state experienced in the recent recession. He notes that manufacturing jobs for the first half of 2004 are fairly steady.

MANUFACTURING SECTORS AND FACTORS INFLUENCING THEM

Sector Breakdown

The manufacturing sector is divided into two groups, durable products and non-durable. Durable products include the jet engines built at Pratt & Whitney and helicopters built by Sikorsky Aircraft. Non-durable goods include chemicals, paper products, textiles, and plastics. Durable goods jobs decreased 22. 6% from 1994 to 2003 while jobs producing non-durable goods decreased 17. 3%.

Table 2 shows job losses in each durable manufacturing sector from 1994 to 2003. Transportation (which includes ship building and aerospace) lost the greatest number of jobs: 16,600. But computers and

electronics (which is a smaller sector) actually lost a greater percentage of its jobs (30. 9%). Fabricated metals lost the fewest jobs by percentage (16. 8%).

Table 3 shows the non-durable jobs picture, which is somewhat brighter than durables. Chemical and pharmaceutical products is the one manufacturing sector that shows a jobs increase. Tirinzonie notes that plastics and rubber products has been relatively stable.

Table 2: CT Durable Manufacturing Jobs by Sector, 1994-2003

Table 3: CT Non-Durable Manufacturing Jobs by Sector, 1994-2003

Factors Influencing Job Loss

There are a number of reasons why manufacturing jobs may be lost in Connecticut. A partial list includes the following.

Tirinzonie says that the number of jobs created by durable manufacturing is heavily influenced by gains in technology that make companies more efficient. “In durable, you are able to produce as much if not more with the same number of workers due to advances in technology,” he said.

Tirinzonie said increased efficiencies and the relocation of industrial facilities are two significant reasons for the steady decrease in durable goods jobs. He said there is no reliable data on manufacturing relocation or outsourcing.

An Example: Kimberly-Clark Layoffs

Last month Kimberly-Clark announced it is laying off about 350 workers at its New Milford plant. The company will cease making disposable Huggies diapers at the plant by the end of September while four other plants in North Carolina, Texas, Utah, and Wisconsin, will continue making diapers. They will still produce tissues at the New Milford plant.

The company cited the following reasons for the layoffs:

So this appears to be a decision made due to the combination of a number of factors.

The mill uses sophisticated process controls and other up-to-date equipment that contributed to the company’s increased efficiency. The laid-off workers are hoping such skills will help them find new work, but many are not sure if that work exists in the state.

Connecticut’s Outlook

Tirinzonie estimates the state will lose 20,000 more manufacturing jobs over the next 10 years. This would mean manufacturing would go from representing 13% of the state’s workforce to 10%. This would represent a slowing down of the job loss rate when compared to recent years.

“We are not a very strong employment growth state because we are small, densely populated, and it’s costly to own land in this state. But that doesn’t tell the whole story, because some of the jobs we have a good chance of keeping are better jobs that require a more highly educated workforce. We have a highly educated population,” he said.

He noted that many of the non-durable products jobs that did not require a highly trained or educated workforce left Connecticut years ago, such as textiles. That tends to leave the highly technical jobs, such as those in the chemical and pharmaceutical sector, that are not as readily exportable.

He and other economists predict the state will continue to evolve into a more service-providing economy rather than a goods-producing one in the coming decade.

JM: ro