2007 Looking Ahead: Manufacturing strong; labor shortage a concern

BYLINE: John Dobberstein, Tulsa World, Okla.

Dec. 31--Oklahoma's manufacturing sector should continue to grow next year, but labor shortages will be an ongoing issue, experts said.

The state's aerospace and energy companies are booming -- a big factor in the sector's growth, said Roy Peters, president of the Oklahoma Alliance for Manufacturing Excellence.

"Everybody I talk to is doing very well, and they don't see much of a slowdown in the near term," Peters said. "All indications are things will stay pretty strong through the calendar year."

Dragging down the state, statistically, is bad news in Oklahoma City, where the closing of the General Motors Corp. and Dayton Tire plants resulted in the loss of about 3,600 jobs in 2006. Researchers said GM's decision jeopardized another 13,300 jobs across the state.

If the GM and Dayton Tire losses are discounted, the picture in Oklahoma improves, said Mark Snead, director of Oklahoma State University's Center for Applied Economic Research.

"We're looking for very modest growth -- nothing like a bounce," Snead said. "It's just that some of these large losses drive down the numbers. Tulsa is showing some signs of stronger manufacturing growth."

Dating back to last year, Oklahoma manufacturing was expected to grow by 0.63 percent through the second quarter of 2007, with a net gain of 920 jobs, according to the U.S. Bureau of Labor Statistics.

The bureau projected that Oklahoma will have 145,050 manufacturing jobs next year, with most of the gains in the food, beverage, wood and machinery sectors. Job losses are expected in the printing, apparel, metal fabricating and transportation equipment sectors.

Oklahoma had 176,000 manufacturing jobs in 1999.

In Tulsa, manufacturing has been strengthening. The metro area had 48,000 jobs in that sector last month, up from 45,700 in early 2005.

The long-term manufacturing outlook in Tulsa is promising, although the area's growth will be outpaced by almost every other employment category. Manufacturing jobs are expected to increase by 2.3 percent through 2012, the bureau said.

Snead said manufacturing is the hardest industry to predict, but its trends tend to go in long cycles and Oklahoma is in the early stages of a growth cycle.

"Hopefully, companies can get a foothold and start competing," he said.

Manpower is a major factor limiting manufacturers, Peters and Snead said.

A survey of Tulsa manufacturing companies this year revealed that 36 percent were constantly recruiting employees or always had jobs open -- despite the fact that only about a quarter of those jobs required post-secondary education, and only 3.2 percent required a license or certificate.

The median wage offer was $16 an hour, higher than many other industries.

Peters said the state's CareerTech program is offering more short-term programs to get workers into the employment funnel sooner. And some employers are reaching out to under-served populations such as welfare recipients and youth offenders, he said.

"That might be a population that manufacturers wouldn't have thought of, but several of them have been making pretty darn good workers," Peters said. "Some who are underemployed, with some training, can get into manufacturing jobs.

Peters said the alliance is also doing everything it can to recruit young people. He believes manufacturers are still grappling with image problems that, even if inaccurate, drive away job seekers and students.

"Manufacturing pays a higher wage, on average, than jobs in much of the service sector," Peters said. "They almost always have benefits with them. It can be a really great career. We need to tell that story."

Snead has a quicker solution to finding workers.

"Just pay higher wages," he said. "Companies tend to just pay what they can survive on.

"The problem, as it has always been, is foreign competition -- very high-quality, low-cost foreign competition. It's not going to go away in 2007."

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