NE Ohio Manufacturing GDP to Rise While Employment Stagnates

CLEVELAND – A report released Monday by the Manufacturing Advocacy and Growth Network, or Magnet, and Team NEO shows that output from manufacturing sector in Northeastern Ohio should grow through 2025, while employment is likely to remain below prepandemic levels.

One reason for this is that manufacturers across the region are expected to embrace advanced methods of production, enabling technology to drive much of the sector’s gross domestic product, states the report, published as the Team NEO Quarterly Economic Review.

“Manufacturing is the backbone of our region, impacting the prosperity of our communities,” says Ethan Karp, president and CEO of Magnet. “The release of ‘Make It Better: A Blueprint for Manufacturing in Northeast Ohio’ earlier this summer provides a vision for how the sector will succeed in becoming a global leader in smart manufacturing in the next decade.”

The report released Monday shows where sectors within manufacturing stand today. Manufacturing companies in northeastern Ohio employ more than 248,000 workers throughout 7,700 facilities, generating a combined $46 billion in annual GDP, the report finds.

Among key takeaways is that the largest number of manufacturing occupations includes a mixture of traditional and more advanced positions.

Largest employers in the manufacturing sector are those companies engaged in fabricated metal production, according to the report. Collectively, this industry employs more than 47,300 people in the region.

Other subsectors that are significant employers include machinery, with 30,100 employees; transportation and equipment, with 26,250 employees; food manufacturing, with nearly 20,000 jobs; and computer and electronics manufacturing, which employs 9,700 workers.

The largest industry in terms of GDP in 2021 is chemical manufacturing at more than $8.1 billion, the report shows, while primary metals manufacturing represents $6.1 billion. The fabricated metals industry constituted nearly $5.4 billion in GDP during 2021.

Manufacturing GDP across northeastern Ohio is projected to increase by 8% through 2025, a slower pace than the U.S. rate of 16%.

Still, while northeastern Ohio’s manufacturing sector is expected to improve output over the next three years, employment is likely to remain 10% lower when compared to prepandemic levels in 2018. The U.S. rate is expected to fare slightly better at 5% below 2018 numbers.
 
“Today, advances in technology are changing the face of manufacturing,” the report states. “With these changes, there is an opportunity to upskill workers.”
 
General manufacturing employment is projected to decline across most sectors through 2025, which the report attributes in part to greater use of automation and technology.

However, beverage sector employment is expected to experience significant growth of 12.3%, the report finds.
 
Subsector GDP projections show several growth areas for the region by 2025. Primary metals manufacturing, for example, is expected to increase by 54%, while chemicals manufacturing is projected to grow in output by 29%.

At the same time, the nontraditional computer and electronics sector is projected to grow 33%.
 
The overall decline in employment can partially be attributed to the inability of manufacturers to fill open positions. But GDP can realize significant gains with implementation of innovative technologies such as the Industrial Internet of Things (IIoT) and additive manufacturing.

As the report notes, initiatives such as Magnet’s Manufacturing Blueprint engage manufacturers around four key pillars for growth – talent, transformation, innovation and leadership. The Smart Manufacturing Cluster, facilitated by Team NEO, is the platform that helps small- to mid-size manufacturers accomplish each of the four pillars, says Joay Foran, Team NEO senior vice president, industry and innovation.
 
“Since 2018, Team NEO’s Smart Manufacturing Cluster has convened manufacturers, solution providers, academia and others to accelerate the growth and competitiveness of our manufacturing community through smart manufacturing technologies and processes,” Foran says. “We look forward to enhancing our efforts by fully leveraging the Manufacturing Blueprint in all our cluster efforts.”

Team NEO publishes its Quarterly Economic Review to provide a holistic picture of the regional economy. The nonprofit organization uses Moody’s Economy.com, the U.S. Bureau of Labor Statistics data, and Ohio’s Labor Marketing Information to aggregate regional figures.

To download the full report, CLICK HERE.