The new availability of inexpensive natural gas has ignited the steel, iron, fabricated metals and machinery manufacturing industries as well as those of plastic, rubber, resin and organic chemicals. And this trend will continue through 2020, according to a report released today by the U.S. Conference of Mayors and prepared by IHS Global Insight.
The report, Impact of the Manufacturing Renaissance from Energy Intensive Sectors, projects that energy intensive manufacturing employment will expand by more than 1% annually nationwide, with 72% of those jobs coming in metro areas.
“We believe the energy revolution is helping the U.S. regain its footing in the manufacturing sector,” said Lansing, Mich. Mayor Virg Bernero, chair of the U.S. Conference of Mayors Advanced Manufacturing Task Force. “Most of these manufacturing jobs will occur in our cities and their metropolitan regions, which we know are the drivers of the national economy.”
The report provides employment and sales growth from 2010 to 2012 for nine manufacturing industries including fabricated metals, machinery and plastics that are energy intensive. It also forecasts expected employment and sales from 2012 to 2020 in the top 100 metro areas, all 363 metros combined, and nationally, for the nine manufacturing sectors.
Key findings include:
• Over the last three years, metro area manufacturing employment has expanded by an average annual rate of 1.7%. Energy intensive industry, in particular, has been a key component in manufacturing expansion.
• From 2010 to 2012, energy intensive manufacturing sectors added over 196,000 jobs and increased real sales by $124 billion in the nation’s metro areas. In 2012, metro economies accounted for greater than 78% of the total employment and 82% of the real sales in energy intensive manufacturing industries.
• Expanded demand for new pipelines and mining equipment has resulted in a 17% increase in real sales and a 9.7% increase in employment (2011-2012) in steel, iron, fabricated materials and machinery manufacturing in metro areas.
• The increased availability of natural gas and oil also resulted in a surge in plastic, rubber, resin and chemical manufacturing, resulting in these industries increasing their employment by 2.6% within metro areas.
• The Chicago metro area leads the fabricated metals sector with 64,536 jobs in 2012, slated to grow to 75,757 jobs in 2020, or a 2% average annual growth rate. The sector’s annual sales growth rate is expected to be 2.8% nationally through 2020.
• The Houston metro leads employment in machinery manufacturing with 53,377 jobs in 2012, projected to grow to 69,591 jobs by 2020. Nationally, the sector is expected to see 3.7% increase in sales through 2020.
• Chicago had the highest level of employment among metros in iron and steel (18,911 jobs); fabricated metals (64,536 jobs); nonmetallic mineral manufacturing (8,816 jobs); and plastics and rubber products manufacturing (29,468 jobs). Houston led employment in organic chemical manufacturing (20,225 jobs); machinery manufacturing (53,377 jobs); resin, rubber and fiber.