Clark, Floyd Bucking Indiana's Manufacturing Trend
By LARRY THOMAS
Larry.Thomas@newsandtribune.com

While other areas of Indiana continue to seek ways to replace 91,000 manufacturing jobs lost since 1998, Clark and Floyd counties largely have maintained their manufacturing employment base and are looking to increase such employment during the next few years. During the second quarter of 2006, manufacturers in Clark County employed 7,816 workers, an increase of 203 compared to the same quarter five years earlier. Average wages for those jobs increased by $137 per week, to $814.

During the same five-year span, Floyd County lost 608 manufacturing jobs, but average weekly wages per job increased $82, to $688. The data was compiled by the Indiana Business Research Center. Those numbers don’t include recent activity, said Matt Hall, One Southern Indiana’s vice president for economic development. “We’ve added, just in expansion numbers alone, over 1,700 jobs” since One Southern Indiana was formed in July, Hall said. “It’s what gets me up in the morning. I fully expect to bring in more jobs.”

“You are not alone,” said Nathan Feltman, Indiana’s commerce secretary and the CEO of the Indiana Economic Development Corp. “There are a number of counties that are gaining ground in the manufacturing sector.”

Feltman said most of the counties that are increasing manufacturing employment are south of Indianapolis and have several common denominators — ranging from strong existing work forces to low costs for land, construction and utilities.

Dr. Uric Dufrene, an IU Southeast economist, said data for manufacturing employment can be deceiving, because of the way the government categorizes staffing-service employees. Even when an employee of a staffing service works in a manufacturing job, they are categorized as administrative services, a subsection of professional and business services.

“Manufacturing operations might contract some of their labor to a temporary-services firm,” Dufrene said.

Even as Colgate-Palmolive Co. plans to close its Clarksville plant by year’s end and displace nearly 500 workers, growth in new manufacturing jobs is outpacing those lost. Last year, Jeffboat alone announced that it would hire 1,100 additional workers to meet the demands for river and ocean-going barges. Jeffboat is a division of Jeffersonville-based American Commercial Lines Inc.

Hall said that since One Southern Indiana formed in July, more than 100 “qualified projects” — defined as relocations and expansions that will likely happen, whether here or somewhere else — have crossed his desk.

“We are getting a tremendous amount of activity, a tremendous amount of new projects,” Hall said. “Business is great here.”

The growth in local manufacturing jobs is of particular interest to Dufrene, who is in the midst of a research project to identify the factors contributing to the expansion. At this point, Dufrene says the combination of intermodal transportation — such as having barge, rail and truck traffic — and the area’s geographic proximity to major metropolitan areas likely are key factors in Southern Indiana’s ability to grow its manufacturing jobs base.

And there could be another factor, too.

“We’ve certainly got some strong economic-development leadership,” Dufrene said.

Feltman agreed. “The local communities in Southern Indiana have been very, very aggressive partners with us,” he said.

Feltman said the partnerships between local and state government have ranged from cooperation on incentives designed to attract new businesses or to help existing businesses expand to local officials participating in state trade missions abroad.

Dufrene said U.S. manufacturing also could get a boost from international currency markets.

“As the dollar weakens, we’re seeing exports in this country increase,” he said.

Hall said it is important that people realize that the new manufacturing jobs are helping increase average wages in Clark and Floyd counties. According to private sector wage data released in January, the average hourly wage in Clark County increased 55 cents to $14.70, while Floyd County’s average wage increased 43 cents, to $15.08. Those numbers include all private sector, or nongovernment, employment and do not solely reflect manufacturing wages, he added.

“Our average wage is going up, and it’s not just due to inflation,” Hall said.

“A big part of that (increase in local wages), for sure, can be attributed to manufacturing jobs,” Feltman said.

Feltman said about 22,000 new jobs were created in Indiana in 2006 and about two-thirds of the projects creating those jobs were related to manufacturing. While the average Hoosier worker makes only about 90 cents on the dollar relative to national wages, the new jobs created in the state last year paid about $4 per hour higher than the state’s average.

During the past three years, state government has taken aggressive steps to help attract new jobs, Feltman said, ranging from infrastructure improvements that will be funded by Gov. Mitch Daniels’ Major Moves project to a 15 percent research and development tax credit — the highest such credit in the U.S.

“We believe we’re creating one of the most competitive (economic development) environments in the country,” Feltman said.

Article Source:  Larry Thomas, The News and Tribune