The Year of the (Philadelphia) Manufacturer?

February 18, 2014

Will 2014 be the year of the Philadelphia manufacturer? It’s too early to tell with any certainty, but many industry observers are seeing increasing levels of enthusiasm for a segment of our economy once written off as dead.

This perception shift is great news for the American manufacturing base, as well as small and midsized manufacturers in and around Philadelphia. Like many American cities, regional leaders understand the significant economic impact manufacturing provides to local economies. Manufacturing is also viewed as the means to compete in growing, global markets.

Over time, our region has experienced a shift away from the many telltale visuals that have corrupted recent generations with misconceptions of what it’s like to be in the business of making things here in the Philadelphia region. Empty factories are monuments of days gone by and generations past.

The part of the story we don’t often hear is that the remaining or new firms in the city have changed; similar to the suburbs, we no longer have the massive textile factories, etc., in the city. Today we have a diversity of niche players such as electronic component, fabricated metal, machinery, medical device, food, chemical, and aerospace firms.

During a recent press event held at AgustaWestland’s North American headquarters here in Philadelphia—a state-of-the-art facility that produces dozens of helicopters each year—City Council members and local business leaders gathered to review the findings of a report from Mayor Nutter’s Manufacturing Task Force.

According to event coverage in the Philadelphia Inquirer, there was a sense of genuine enthusiasm from government officials and business leaders, individuals who came together to draw a brighter picture for the future of manufacturing in Philadelphia.

In his address to those on hand for the presentation of the task force’s 97-page report, City Councilman Bobby Henon, one of four co-chairmen of Mayor Nutter’s Manufacturing Task Force told the crowd that although “we cannot bring back the old factory jobs of my father’s time,” the city can “become an advanced manufacturing hub in the coming decades.”

Additional task force chairmen included deputy mayor of economic development Alan Greenberger, AgustaWestland CEO William Hunt, and Dan Fitzpatrick, CEO of RBS Citizens Pennsylvania, New Jersey, New York and Delaware and Chairman of the Greater Philadelphia Chamber of Commerce.

During the event, task force representatives presented the following findings:

  • Regional manufacturing generates $105.6 billion in annual output.
  • Philadelphia city manufacturers pay $1.3 billion in annual wages to 23,000 employees, who earn an average of $58,997 a year.
  • Of the city’s 750 manufacturing firms, 575 employ fewer than 20 people.
  • Regionally, 163,000 individuals are employed in manufacturing.
  • The city’s competitive strengths are in chemicals, medical equipment, machinery, food processing, transportation, equipment, and parts.
  • One particular advantage is the city’s transportation infrastructure.
  • The task force recommended that new loan and equity funds be created specifically for small manufacturers investing in product development.
  • Manufacturers complain about the city’s complicated tax structure.
  • They are also concerned about the availability and readiness of the local workforce. One unnamed company cited in the report offered the following example: they received 780 application requests, but just 475 of these were completed after the applicants were told they would be asked to take a drug test. Of those 475, 430 were asked to take an employment test—which only 75 passed. Following an additional screening for workforce compatibility, 29 remained. In the end, just 15 individuals were offered jobs.
  • The task force recommends more emphasis on science, technology, engineering, and math, urging technical education programs in area high schools and community colleges.

We have a long way to go in 2014—and the work to restore our region’s manufacturing base will extend far beyond next December—but these findings confirm the importance of focusing both public and private leadership to support and grow manufacturing in Philadelphia.

The complete report can be viewed on the Philadelphia Industrial Development Corporation website.