Wednesday, January 17, 2018
Business

Leaner manufacturing bringing industry back from depths

FARMINGDALE, N.Y. — The economy is firming, hiring is on an upswing and consumers appear inclined to spend.

That's good news for D'Addario & Co., a U.S. company that manufactures the strings found on all sorts of musical instruments, from cellos to electric guitars.

Like many U.S. manufacturers, it's still trying to make up for ground lost during the Great Recession. It's doing so in part by investing in technology that makes it lean, boosting output with fewer workers.

"We're not all the way back yet. We're probably about 85 percent back" to prerecession levels, said Rick Drumm, co-president of D'Addario.

"The entire music products industry, $7.5 billion in the United States, really has not had any growth in 10 years plus," he said.

Indeed, even with recovery, the manufacturing sector is at best about three-quarters of the way back, less so when tech products such as semiconductors are taken out of the mix. At a contemporary peak, manufacturing represented about 21 percent of the U.S. economy in 1980. Today, it's closer to 12 percent; the sector employs about 12 million workers.

"The general economy fell only 4 percentage points in the recession, but manufacturing fell (almost) 20 percent," said Daniel Meckstroth, chief economist for the Manufacturers Alliance for Productivity and Innovation, an industry research group. "Obviously, it's going to grow faster because it went into a deeper hole, but it's got more to make up."

The long slog back is also reflected in the hiring numbers.

The sector lost more than 2 million jobs, or 15 percent of the manufacturing workforce, from December 2007 to June 2009. The job losses continued beyond the official end of the recession, and at the end of 2009, the sector had its lowest employment level since 1941.

The sector has gained a little more than half a million jobs since February 2010. That would be good in normal times, but these aren't normal times.

A key reason is that manufacturers are rebounding in part thanks to greater productivity, getting more output from fewer workers.

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