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IMA touts manufacturing’s impact on Illinois’ economy

Friday, Aug 5, 2022

* Dave Dahl

“Manufacturing Matters” is the name of a tour the Illinois Manufacturers’ Association is on to promote a new study which shows things are better than many people believe.

IMA’s president and CEO, Mark Denzler, said, “Education workforce is probably the Number One challenge that manufacturers face. Before the covid pandemic, the state’s unemployment rate was about three percent. Today it’s just slightly over that.

“Nearly every manufacturer has a Help Wanted sign,” Denzler said Wednesday at the tour’s kickoff in Decatur, “trying to attract (workers); whether it’s young men and women coming out of high school, dislocated workers, returning veterans; we have to get them into jobs. We have to better showcase what manufacturing is. I don’t think manufacturers pat ourselves on the back enough to show what we do.”

The study’s author, Joseph Von Nessen, a research economist at the Darla Moore School of Business at the University of South Carolina, talked about the “household spending multiplier.”

* From the study’s executive summary

The Illinois manufacturing industry represents a key economic pillar of the state’s economy. Comprising a diversified employment base across a wide range of industry subsectors, manufacturing is the state’s largest industry when ranked by contribution to GDP.

The total economic impact of manufacturing on the state of Illinois is estimated to be between $580 billion and $611 billion annually. This figure reflects the dollar value representing all final goods and services produced statewide that can be attributed (directly or indirectly) to manufacturing. This level of economic activity corresponds to between 1,681,284 and 1,771,928 jobs and to between $142 billion and $150 billion in labor income for Illinois residents.

Although manufacturing’s direct employment base alone represents roughly 9.5 percent of all jobs in Illinois, after accounting for the additional impacts resulting from all economic multiplier effects, this percentage jumps to 29.6 percent. This means that manufacturing ultimately supports nearly 30 percent of all jobs in Illinois, making it among the state’s largest industry sectors.

The Illinois manufacturing industry maintains an employment multiplier of 2.7. This implies that for every 10 jobs that are supported directly by the manufacturing industry, an additional 17 jobs are created elsewhere in Illinois (for a total of 27 jobs). This multiplier effect is significantly higher than that of the average industry in Illinois, meaning that future expansions of manufacturing have the potential to generate relatively higher secondary employment impacts when compared to similar expansions of businesses in many other industry sectors.

The majority of the manufacturing base in Illinois – approximately 65 percent – derives from the five major subsectors of Food and Agriculture Manufacturing, Metal Fabrication Manufacturing, Heavy Equipment Manufacturing, Pharmaceutical Manufacturing, and Transportation Equipment Manufacturing. The total annual economic impacts of these subsectors are $135 billion, $71 billion, $61 billion, $59 billion, and $44 billion, respectively.

As a group, these five subsectors also contain among the highest employment multipliers and average wages across all of Illinois’ manufacturing base. The pharmaceutical manufacturing subsector is an especially unique outlier with an employment multiplier of 3.7 and an ability to support jobs with an average wage 46 percent above that of the average job in the Illinois manufacturing industry as a whole.

The Illinois manufacturing industry continues to evolve in the face of rapid technological development. This study’s examination of the requirements associated with manufacturing occupations projected to be in the highest demand over the next decade suggests a shift towards a more high-skilled, experienced workforce. As such, the Illinois Manufacturers’ Association has supported the creation of two new world- class Manufacturing Academies designed specifically to provide workforce training to Illinois residents in these high-demand fields.

- Posted by Rich Miller        

  1. - Da big bad wolf - Friday, Aug 5, 22 @ 11:09 am:

    === As such, the Illinois Manufacturers’ Association has supported the creation of two new world- class Manufacturing Academies designed specifically to provide workforce training to Illinois residents in these high-demand fields.===
    I don’t understand the need for specific Manufacturing Academies when manufacturers are helping community colleges design courses. And the students would have to travel to theses two academies. Illinois is a pretty large state.

  2. - Blue Dog - Friday, Aug 5, 22 @ 3:02 pm:

    I would disagree that education workforce is the number one challenge. My peers have pinpointed the number one challenge is developing a work ethic. This can only be taught at home. By example. Rarely have I seen a young person not succeed if the parent(s) are hard, reliable workers. Conversely, if a young person comes from an environment that didn’t place an emphasis on being a hard,reliable worker, they generally weren’t a great or even average member of the team. I never officially tracked this to back up my comments, but I wish I would have. I promise you , this was my overwhelming experience.

  3. - Oswego Willy - Friday, Aug 5, 22 @ 3:05 pm:

    ===…developing a work ethic. This can only be taught at home. By example. Rarely have I seen a young person not succeed if the parent(s) are hard, reliable workers.===

    1) Anecdotal is NOT data

    2) Athletics and team sports promote a work ethic, “rarely” is a lazy athlete that’s not a team player given the opportunity to play. Work ethic is something nurtured in many ways

  4. - Blue Dog - Friday, Aug 5, 22 @ 3:10 pm:

    OW. Just curious where your experience comes from. We all have history and it’s all pertinent so I respect your input.

  5. - Blue Dog - Friday, Aug 5, 22 @ 3:13 pm:

    OW. I too think sports can be a good development tool for hard work, but after years of hiring people I found it to be not as guaranteed as mentioned in my original post.

  6. - Oswego Willy - Friday, Aug 5, 22 @ 3:14 pm:

    My experiences are best when talking to those not like me, and understanding that my experiences are not necessary the same as everyone’s, and my own experiences are not data to things that might have a measure or other options to reach similar goals, as challenges others face are different than mine.

  7. - Blue Dog - Friday, Aug 5, 22 @ 4:24 pm:

    yes OW. that’s a very rationale reason. same with me. in my retirement years I have been fortunate to belong to a think tank group os small manufacturers (less than 500 employees). our group of 11 range from east st. Louis to Marion to Perryville, mo. each has a bit different story but it’s amazing how the work ethic thing is a nearly unanimous problem. I’m sure all of us has their thoughts on on why some possess a strong work ethic and others not, but a common theme seems to be centered around a developed work history.

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