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For Release — Tuesday, July 28, 1998

MANUFACTURING IS GROWING AGAIN IN NEW YORK —
BUT HASN'T CAUGHT UP TO NATIONAL PACE, REPORT FINDS

ALBANY—New York State's manufacturing sector "is making a comeback," a new report by The Public Policy Institute says.

The report, The State of Manufacturing in New York State, shows that manufacturing employment statewide grew slightly in 1997, the first annual increase in more than a decade. During the six years ending in 1994, while most states added factory jobs, New York lost an average of more than 43,000 such jobs each year.

"The resurgence of our manufacturing base is broad-based," says the report, released in printed form and published on the World Wide Web today by the Institute, the research affiliate of The Business Council of New York State, Inc.

"Upstate and downstate are sharing equally in the resurgence," the report says. Areas of the state that gained manufacturing jobs from April 1997 to April 1998 include Albany-Schenectady-Troy; the Binghamton area; Buffalo-Niagara Falls; Dutchess County; the Elmira, Glens Falls and Jamestown areas; Long Island; Steuben County; and the Syracuse area. Factory employment declined during the period in New York City and the Rochester area.

New data from the U.S. Census Bureau show that manufacturers have set the stage for continued growth, according to the report. New capital investment in industrial facilities jumped 33 percent in 1995-96, compared to the two previous years, to a total of more than $10 billion. Only six other states reported greater levels of capital investment.

Still, after years of sharp decline, the state's manufacturing sector has not completely turned around, the report says. New York continues to lag the nation in growth of factory jobs.

The report includes a "snapshot" description of manufacturing in New York. It shows, for instance, the leading industrial employers include printing and publishing, with 139,500 jobs in 1996; apparel, 91,200 jobs; industrial machinery and equipment, 84,200 jobs; and electronic and related equipment, 82,900 jobs.

"Manufacturing still makes up much of the bone and muscle of New York State's economy," the report says. "Upstate metropolitan areas such as those around Rochester, Buffalo and Syracuse depend heavily on industrial jobs, as do dozens of smaller communities from Glens Falls, to Oneida, to Jamestown. In the bustling downstate metropolitan area, manufacturing is often the forgotten sector of the economy. Still, it's vitally important—providing, for instance, more than a quarter-million jobs in New York City, 110,000 on Long Island, and nearly 40,000 in Westchester County."

Contrary to popular belief, wages for production workers are not out of line in New York—in fact, they're 2 percent lower than the national average, the report shows. Overall manufacturing wages are higher, on average, than in most other states. But that's because the Empire State has a greater proportion of its manufacturing employment in research and development, corporate headquarters and other non-production positions that tend to pay more than production jobs.

The report says there are signs of a slowdown in the nation's manufacturing economy, and calls for continued improvements in New York's business climate to keep industry growing here. After showing year-over-year growth during the first four months of 1998, the state's manufacturing employment reflected slight losses from a year earlier this May and June, while factory jobs continued growing nationwide.

"We've proven that we can grab a larger piece of the national manufacturing pie," the report says. "We've done that by becoming more competitive." Taxes are lower, workers' compensation premiums are down, and a traditionally hostile regulatory climate is much better, it says.

The state should continue to improve its climate for manufacturing by improving job training, reforming the liability system, and continuing to cut the cost of doing business, the report says.

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