Manufacturing is the foundation on which Pennsylvania’s economy was built and the driving force that provides family-sustaining wages for Pennsylvanians across the Commonwealth. Natural resources, educated workers and infrastructure are credited for driving the state’s production, which ranks eighth in the nation, according to recent research. And that’s not even the whole picture.
Manufacturing is one of Pennsylvania’s most important wealth generators.
Research shows that manufacturers in Pennsylvania account for 12.01 percent of the total output in the state, employing 9.74 percent of the workforce. Total output from manufacturing was approximately $79.62 billion in 2014. In addition, there were 569,700 manufacturing employees in Pennsylvania in 2015, with an average annual compensation of more than $62,000.
According to Pennsylvania’s True Commonwealth: The State of Manufacturing study commissioned by Pennsylvania’s Industrial Resource Centers, it is the largest source of Gross State Product (GSP) and its fourth-largest employment sector. Manufacturing remains a key part of Pennsylvania’s innovation infrastructure and is present in all parts of the state.
As the demand for manufacturing grows, it in turn spurs the creation of jobs, investments and innovations elsewhere.
Manufacturing has the highest multipliers of any other Pennsylvania industry, according to the IRC study. Every $1 increase in final demand for products manufactured in Pennsylvania leads to a total increase in gross value added by all industries of $2.52. No other industry in the state comes close to rivaling the impact of manufacturing:
- Experts estimate that a $1-million increase in final demand for manufactured products in Pennsylvania results in the creation of 4.2 jobs; 2.9 jobs directly and indirectly in manufacturing and an additional 1.3 jobs through the spending of employees of the manufacturers and the employees in their supply chain;
- Manufacturing’s labor income multiplier effect of $3.60 is more than double that of most other Pennsylvania industry sectors. Manufacturing’s multiplier is so extraordinarily high because of the length of its supply chain, which is reflected in its indirect income multiplier of $1.74.
In this edition of the Business Magazine, our 7th annual Made in PA issue, we’ll showcase the importance of manufacturing in the Keystone State, the many manufacturers that are proud to operate here, as well as the innovation and technology that many small and midsize firms are making in their operations right here in our own backyard. We’ll also introduce the MBA’s new Board of Governors and talk with Northwest Commission Executive Director Jill Foys on the organization’s new Veteran’s Initiative that is helping connect employers with former military personnel to help address the shortage of skilled workers.
Experts agree that Pennsylvania needs such resources and investments for industry to grow. The Manufacturer & Business Association (MBA), for one, has taken the lead as a strong advocate for pro-growth policies that will strengthen manufacturing and create jobs in the Commonwealth. To learn more about the MBA’s many programs and services, visit www.mbausa.org.
