Report shows ‘quiet’ job growth in region

March 13th, 2014

News Coverage:

Report shows ‘quiet’ job growth in region

Posted: Wednesday, March 12, 2014 11:00 pm | Updated: 6:45 am, Thu Mar 13, 2014.

By Linda Lipp

When the northeast Indiana economy began to rebound from the Great Recession, the manufacturing sector led the way in bringing back jobs.

But manufacturing’s contribution to job growth in the region has slowed, according to the Business Dynamics report for 2013 prepared for the Northeast Indiana Regional Partnership by the Community Research Institute at Indiana University-Purdue University Fort Wayne.

In 2011, about 60 percent of the jobs new and expanding businesses in the industries tracked by CRI pledged to add were in manufacturing. By 2013, manufacturing counted for just 40 percent of the jobs companies said they expected to create.

“During the recession, when products, lines and shifts were eliminated, we saw that reflected in downsizings. Coming out of that, we saw a surge,” said Ellen Cutter, director of the CRI.

While manufacturing and other businesses are continuing to create jobs in northeast Indiana, the growth more recently has been coming in smaller increments with little or no publicity attached.

CRI compiles its data from public announcements of job changes and company investment plans from local, regional and state government sources as well as the news media. The 2013 figures suggest the region is in a quiet growth phase in which businesses are not likely to announce minor hiring or reduction efforts, the report noted.

“We see this as the economy getting back to business as usual,” Cutter said.

John Sampson, president and CEO of the regional partnership, said he also sees “a great deal of uncertainty” about the overall economy among business leaders who are not willing to commit to adding large numbers of employees, although they will spend on technology.

“Everybody nationally is suffering the same malaise,” Sampson said.

In 2013, there were 10 new company announcements, one reopening company announcement and 119 expansion announcements in the region that includes Adams, Allen, DeKalb, Huntington, LaGrange, Noble, Steuben, Wabash, Wells and Whitley counties. The new companies involved were expected to invest $23.7 million in buildings and equipment, and the investment in expansion plans was pegged at $506 million, according to the Business Dynamics tally.

The numbers in 2012 were very similar: a total of 11 businesses new to the region announced plans, and there were 120 expansion announcements among existing companies.

Businesses new to the area pledged in 2013 to create 597 jobs, 230 fewer than the 827 jobs companies promised in 2012. And the expansions announced last year were expected to create 2,607 jobs, almost 300 fewer than the 2,903 jobs expanding companies pledged in 2012.

There were fewer losses, however, with 746 job reductions related to closings and downsizings in 2013 compared with 1,018 in 2012.

CRI recorded 145 jobs affected by layoffs in 2013, which it considers being temporary in nature, rather than more permanent downsizings, with workers subject to call-backs gradually as business improves. In 2009, for example, it logged 6,559 layoffs, but most of those were related to two massive layoffs at General Motors Co., and workers later were recalled.

Although job cuts tend to happen relatively quickly, there usually is a lag time between the announcements of jobs companies plan to create and when those jobs actually are created. Because many are promised over a period of several years, the numbers tracked by CRI do not represent increases that actually occurred during the year.

Payroll-based data from the U.S. Bureau of Labor Statistics and other sources backs up the trends CRI has been tracking, however. BLS data track all jobs, including those in retail and other sectors not monitored by CRI, and show the region has seen overall employment grow about 2 percent per year for the last three years.

“As we look ahead, our focus should not just be on the sheer number of jobs the region grows each year, but on good jobs,” Sampson said in a news release accompanying the CRI data.

Industries targeted for economic-development efforts by the regional partnership include auto/vehicle manufacturing, warehousing and logistics, defense, medical devices, food processing and insurance. Five of 2013’s new business announcements were not in targeted industries, the report said.

On the expansion side, 37.8 percent were in targeted industries, and the remainder were not.

Does that mean the regional partnership is re-evaluating its industry marketing priorities? No, Sampson said emphatically.

“What we have to play to from a marketing standpoint is our core strengths,” he explained. Because the area already has substantial business in its targeted industries, companies in those industries know the area has the work force, training capabilities and other supports they would need should they move or expand here.

“We can speak with confidence that we can be responsive to those industries,” Sampson said.