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Manufacturing: Unlikely Leader of the Recovery in Massachusetts

Posted on June 1, 2011

Manufacturing is back.

ManufacturingThe business of making things has emerged as one of the unlikely superstars of the post-crash economic recovery. The renaissance of high-value manufacturing in the Bay State is being driven by factors ranging from technology, exports and efficiency to innovative design and a startling reversal of the off-shoring trend that dominated the 1980s and 1990s.

The result is that Massachusetts manufacturers have added a net total of 1,800 jobs during the past 13 months. Manufacturing productivity grew 6.3 percent nationally during the first quarter and 4.7 percent over 12 months.

The media is full of stories about manufacturers replacing overseas production of complex products and assemblies with regional supply chains in the United States. The Boston Business Journal recently ran a series entitled “A Manufacturing Revival: For Some High-Tech Companies, Making Products in Massachusetts is Making More Sense.” The Economist ran a similar article and even Wired magazine got into the act with a piece detailing the decision of some American companies to abandon production in China because of persistent quality problems.

 “…Stamping out products in Guangdong Province is no longer the bargain it once was, and US manufacturing is no longer as expensive. As the labor equation has balanced out, companies—particularly the small to medium-size businesses that make up the innovative guts of America’s technology industry—are taking a long, hard look at the downsides of extending their supply chains to the other side of the planet,” the Wired article said.

The trend toward “home grown” manufacture of high-value products is nothing new to us here at Associated Industries of Massachusetts. We created the BuyMass business-to-business initiative in large part because AIM-member companies told us that they wanted to create strong and reliable networks of suppliers in New England to maintain control over quality and the process of making sophisticated components. Raytheon Company invested an entire day at a May 5 BuyMass matchmaking event in Springfield meeting with Massachusetts-based providers of everything from radar technology to software.

Manufacturers are forging other alliances as well in an effort to distinguish their products. The Design Industry Group of Massachusetts used its spring conference, “Mass Made:  Reinventing Manufacturing in Massachusetts,” to highlight the way AIM-member companies such as Procter & Gamble|Gillette, NYPRO and the John Matouk Company have used design to rethink both products and manufacturing processes. 

Matouk has used design to reinvigorate a business that prior to 1998 had no signature product and no true identity. The company restructured from a maker of commodity textiles to the manufacturer of a high-end, niche product—luxury bed and bath linens. The company and its products have been called the “most stylish, and most flexible, and best in service” and Matouk competes successfully with the most expensive and exclusive linen companies around the world.

Manufacturing remains a key to the Massachusetts economy, according to Northeastern University economics professor Barry Bluestone:

  • Manufacturing is the fourth largest employer in Massachusetts;
  • Manufacturing generates the second highest payroll, and an average employee salary of $65,000 per year.
  • Twenty four percent of the manufacturing work force is foreign-born;
  • The average age of manufacturing workers is 50, so the largest challenge is replacing workers who can earn as much as $100,000 per year;
  • The average company has fewer than 25 employees and is family owned.

No one expects Massachusetts to return to its industrial heyday making commodity products along assembly lines in sprawling manufacturing facilities. But companies such as Rocheleau Tool and Die in Fitchburg, which last month won an AIM Global Trade award for generating 50 percent of its sales overseas, and Tegra Medical of Franklin, which recently won the inaugural Next Generation Manufacturing award, provide hope that Massachusetts manufacturers will continue good jobs at the crest of the innovation economy.