Process and Product Innovation Key to Mfg Sector in Pa., Report Finds

With contributions of nearly $64 billion annually to the gross state product, manufacturing remains the largest of all industry sectors in Pennsylvania, according to a new report sponsored by the Team Pennsylvania Foundation. Data released by the nonprofit public-private partnership documents the role of manufacturing in Pennsylvania and analyzes the forces shaping the future of the industry.

Manufacturing Pennsylvania’s Future: Regional Strategies that Build from Current Strengths and Address Competitive Challenges shows Pennsylvania's manufacturing sector remains the primary economic driver in the state. Sixteen industries that collectively produce nearly half of the state's manufacturing output have grown and concentrated in Pennsylvania over the past 10 years, the report states. Small and medium-sized manufacturing firms are identified as providing the broad foundation for manufacturing in Pennsylvania.

Despite some high rankings, manufacturing employment in Pennsylvania has declined by 133,000 jobs since 1998, the report finds. Recessionary issues, foreign competition, offshore outsourcing and improvements in productivity are cited as major factors for the job reductions. Increasing competition nationally and internationally also are expected to present significant challenges for the state’s manufacturing sector in the coming years.

Pennsylvania companies that respond to the challenge by becoming faster, better and more cost-effective will best position themselves to compete, report data suggest. To succeed, researchers point to the need for Pennsylvania manufacturers to pay special attention to increasing sales through process and product innovation.

Gov. Ed Rendell will hold a Manufacturing Summit on March 23 for select Pennsylvania manufacturers and economic development providers to further discuss report's the findings and gather input to help develop a comprehensive plan to assist the industry.

Manufacturing Pennsylvania’s Future was commissioned by the state’s Industrial Resource Centers network and the Pennsylvania Department of Community and Economic Development. The report is available at http://www.teampa.com/.