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Manufacturing no longer the best measure

Whenever the newest Erie County employment figures are released, the first instinct of reporters -- after they check the overall unemployment rate -- is to check the manufacturing employment numbers.

If they are heading up, Erie's economy must be on track.

If they are going down -- as they often are -- Erie is continuing its long, downward slide.

Based on that formula, numbers released today would appear to be a good sign for the local economy. Manufacturing employment increased by 400 -- from 24,200 in March to 24,600 in April.

But -- let me let you in on a secret -- the numbers are never going to jump significantly anymore. No matter how strong business gets in Erie's manufacturing sector, we're not likely to see factory employment rise to 30,000, or even 28,000, in Erie County.

It's simply not going to happen. Productivity gains and the inevitable decline of some of Erie's older industries mean there will always be a drag on manufacturing employment numbers -- even if we recruit a slew of new factories to the region.

Long term, the best we can hope for is for the overall number to stabilize -- or, in a true victory, grow slightly.

That doesn't mean manufacturing is dead. It's not.

It doesn't mean manufacturing isn't a key component of Erie's economy. It is and always will be.

But it means that if we really want to see Erie grow, we need to be focusing on adding other industries in addition to manufacturing.

True economic growth will come in areas like information technology, financial services and health care.

And, folks, employment in those industries has been stagnant locally.

Employment in information was just 2,400 in Erie County in April -- down 100 from a year ago.

Employment in the financial sector was just 6,800 -- unchanged from a year ago.

Employment in education and hospitals was 24,500 -- down 200 from a year ago.

If Erie is to experience a true economic renaissance, those numbers have to go up. And they have to go up in a big way.

We need more companies like Erie Insurance Group -- service-based companies that pay excellent salaries and offer opportunities to professional-type workers.

Manufacturing is not dead -- neither is Erie's economy.

But we have to stop focusing on it as the most prominent measure of our economic health.

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This page contains a single entry from the blog posted on May 31, 2006 9:44 AM.

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