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Manufacturing job growth in SD beats forecasts

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Since hitting a historic low point in the Great Recession, the manufacturing sector in San Diego has been on a slow but steady rebound over the past four years, adding 5,000 jobs and strongly beating Sacramento's predictions of a decade's worth of anemic growth.

Nearly 97,000 San Diegans are employed in manufacturing, an increase, after adding 5,000 jobs since the deepest point of the recession in 2009. In comparison, the California Employment Development Department, based on trends in 2010, predicted that the county would add only 700 factory jobs by 2020, mostly in drone production.

After adjusting for inflation, factory output has grown 12 percent since the eve of the recession in 2007, compared with 3 percent for the economy as a whole.

Although manufacturing output slid slightly between 2012 and 2013, it still represented nearly 9 percent of the region's gross domestic product, according to a report Tuesday examining the local manufacturing sector by the National University System Institute for Policy Research.

“Manufacturing remains a vitally important part of the San Diego economy,” said Erik Bruvold, the institute's president, who wrote the report.

But Bruvold's report contains some caveats, as well.

Despite its recent hiring spurt, manufacturing employment is still well below the peaks it hit before the recession and its share of the local economy is down sharply from the Cold War, when it represented nearly 13 percent of local output.

Also, thanks to the growing use of robotics on factory floors and the off-shoring of low-skilled work, manufacturing no longer offers the chance for advancement for workers with low skills or little education that it did in the past.

"This isn’t your grandparents' manufacturing sector," Bruvold said, referring to the era that began with World War II and lasted through the end of the Cold War in the 1990s, when factory work on military production lines could help low-skilled workers get relatively healthy paychecks.

Instead, he said, manufacturing today represents "an assortment of industries that place a high premium on skills and sophisticated levels of training," which has both pluses and minuses for the local workforce.

Those changes will be on display over the next couple days as San Diego businesses gear up for National Manufacturing Day on Friday.

On Thursday, San Diego Workforce Partnership will unveil a report on job opportunities in advanced manufacturing as part of an all-day seminar at the Hall of Champions examining local manufacturing sectors.

And on Friday, the San Diego Regional Economic Development Corp. will mark National Manufacturing Day with morning-long seminars at the San Diego Central Library, followed by tours of manufacturing sites, including military standbys such as Northrop Grumman (NYSE: NOC) as well as newer entrants such as 3D Robotics and Alphatec Spine, a medical technology manufacturer; the BNS and Stone breweries; FITzee Foods, a health-food maker; Shaper Studios Surf Shop; and AmerillumBrands, specializing in energy-efficient lighting systems.

The EDC is encouraging local businesses to attend the event "along with parents and students to learn about the great career opportunities available in manufacturing."

But Bruvold's study suggested that inexperienced newcomers may not find it as easy to get manufacturing jobs as they once did.

The study found:

• Manufacturing employment is growing much slower than manufacturing output. Because of outsourcing and mechanization, manufacturing is still struggling to achieve its pre-recession highs. The current total of roughly 97,000 workers compares with 102,000 in 2007 and an average of 113,000 in the 1990s, as the Cold War was winding down.

• Because local factories don't use so many production workers, the need for a solid education has increased. According to Bruvold's study, only 5 percent of local factory workers lack high school diplomas, compared with 10 percent in the general population. Nearly 35 percent of local factory workers have bachelor's degrees, compared with less than 25 percent in the general population.

"Given its contribution of nearly $1 in $10 to the region’s gross domestic product and the dramatic growth of productivity since 2007, it isn’t surprising that the most common professions in this area demand high levels of education," Bruvold said.

• Manufacturing continues to pay very well. Last year, San Diego factory workers made an average wage of $75,800, compared with $53,800 for the overall private-sector average, representing a total payroll of more than $7 billion. But those high salaries mean newcomers may face more competition for factory jobs.

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