Sunday, September 01, 2013

Power of Positive Pontification

I ponder this every time I see the advertisement: Drilling is just the beginning - American Manufacturing. An immensely feel good ad for sure, right up there with Eminmen's video on Detroit, or more generally Clint's halftime in America meme. But I also saw this story yesterday. Trib: Region's companies manufacture a resurgence. Sort of backs it up... or something?

The article is a bit befuddling to me where it talks about the "height of the manufacturing boom in 1979"?  I thought everyone believed that the 70s were dire times for local steelworkers vis a vis the Super Bowl mythos??   There actually was a late 70s boom(let) of sorts in manufacturing jobs here because of a spike in pipeline manufacturing creating thousands of jobs at local plants.  I'm not sure that is is the reference however. That and it wouldn't be such a positive story since the oil-induced pipeline manufacturing jobs of the late 70s dried up far faster than they ever arrived. Despite the mythos, our pipeline manufacturing jobs this time around have never really kicked off the ground locally, though there are signs of life elsewhere of late.  The painful truth is that local manufacturing employment is now a lower percentage of total Pittsburgh jobs than in boffin-filled Boston? Think about that factoid for a minute.

In the bigger scheme of things, there certainly was no meaningful boom in manufacturing for Pittsburgh during the 1970s. For reference I believe the peak manufacturing employment in Pittsburgh came in at 389 thousand workers in 1952, a level even higher than I believe the region hit during the frenetic production during World War II. With the exception of a Vietnam War induced surge in the late 60s, the longer term trend for manufacuting jobs has been nearly continuously down since the early 50s. Through the 70s you see some bouncing around in the numbers having to do more with national economic turmoil, but otherwise the slow structural change that accelerated soon into the following decade. 

Realize that there are some known hits coming soon to local manufacturing employment numbers.  There are a reported 500 folks still on the job at the Horseheads zinc plant hat are likely to be laid off by the beginning of the year. It will be one of the biggest structural job losses in the local manufacturing sector since the closing of the Sony Plant. At the earliest it will be years before only some of that number will be employed operating the still notional ethane cracker.  Far from Pittsburgh I know, but nearby Erie is about to take an existential hit to its manufacturing sector as some of its mainstay railroad manufacturing jobs move to Texas.

Still... some discern a positive trend out of the graphic below.  We are an insignificant fraction above the all time low for this metric.  I suspect that when the zinc workers lose their jobs this chart will dip to a new all-time low early in 2014. If this is the picture of resurgence, I shudder to think what a downturn looks like.