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Manufacturing allows area to improve faster

Springfield’s recovery has outpaced state and nation, in part because of Honda and Navistar.

Since the Great Recession ended, the local economy has improved slowly and steadily, thanks in large part to growth in manufacturing.

Manufacturing, in fact, has allowed Clark and Champaign counties to recover faster than the state and the nation. Two of the area’s largest employers, Honda and Navistar, added jobs throughout 2012.

Wright State University economist Thomas Traynor predicts continued growth this year, but he said the economy still won’t be at full strength.

“The region is going to continue to experience relatively moderate growth,” said Traynor, who is a professor and the chair of the Wright State economic department. “Indications in the area are suggesting a continuation of what we’ve been seeing.”

According to Ohio Labor Market Information, employment grew 2 percent in 2012.

Traynor referred to a “relatively” flat unemployment rate, low cost of living and an income growth on par with the nation.

But the more immediate Springfield area is doing a little better than the state.

“Both (Clark and Champaign) counties have fared better than the state of Ohio,” said Brian Baker, assistant bureau chief at Ohio Labor Market.

He said that unemployment rates from November 2011 to November 2012 are lower than the state as a whole, pointing out that more recent unemployment rate statistics are preliminary.

“In 2012 we started seeing the city (unemployment rate) drop, and the state’s unemployment rate is a sign the economy is growing faster than its underlying potential,” said Lehan Peters, deputy director of Job and Family Services of Clark County and Workplus One-Stop Center.

“As of today, we’re still seeing the numbers decline. That’s always a great indicator, and hopefully we will see the same (in 2013) and lower the unemployment rate even more.”

A major reason for local economic improvement is manufacturing. In 2011 alone, employment in manufacturing grew from 6,172 employees to 6,619 in Clark County. In Champaign county, that number grew from 2,353 to 2,588 in the same time period. Data from 2012 is preliminary and incomplete.

“Towards the last quarter of 2012 especially, we saw an increase in the automobile industry,” Peters said.

“Ohio’s entire economy is almost entirely reliant on the auto industry,” she said.

She highlighted Navistar, which has been hiring consistently since the end of 2010, Honda and a variety of suppliers such as YAMADA North America.

Officials from Ohio Labor Market say the auto industry has helped bolster Ohio’s overall manufacturing industry.

“The auto industry started to come back, and there was pent-up demand for autos,” said Lewis Horner, chief of workforce research for Ohio Labor Market. “And with the bailout of GM and buyout of Chrysler, that helped us a lot.”

Horner said that from December 2011 to November 2012 — December employment statistics have not been released — manufacturing grew by almost 15,000 jobs.

But regionally, manufacturing doesn’t offer much consolation.

Manufacturing isn’t “shedding jobs like it was for 10 years through 2009. And so that’s probably the best news,” said Wright State’s Traynor.

“That’s an industry that even as it’s growing, it’s becoming more and more capital intensive using more equipment and less labor. We can’t look to manufacturing as a source of a lot of job growth. That’s the challenge facing these manufacturing centers in the country.”

So far, Springfield area officials have looked to continue to invest in manufacturing while diversifying in other areas.

“Our strategy in the economic development efforts is supporting existing industries here, that drives 80 percent of city and (Greater Springfield Chamber of Commerce) efforts,” said Tom Franzen, assistant city manager who oversees economic development. “So that’s going to reflect the strength of existing industries.”

Franzen said most of that is manufacturing related, as well as food, aerospace and materials handling.

Although he could not disclose details, the chamber’s Horton Hobbs said several expansion projects are in the works from existing companies.

“We’re working on a handful of projects right now, and hopefully decisions will be made on these projects in the second quarter of 2013,” Hobbs said.

But a new chance for growth lies in technology and Nextedge Applied Research and Technology Park, which was bought back from the bank from the chamber-run Community Improvement Corporation in October.

“Nextedge being under new ownership and control of the CIC enables us to put together a more in-depth strategy to try and attract new interest,” Franzen said.

He said many industries are cyclical and dependent on the economy. For that reason, initial attempts to grow the technology park failed in 2008 when the economy slowed.

“There will be significant technology investment in the next few years,” Franzen said, “and opportunities in 2013, 2014 in those markets. As they improve we’ll be in a better position to attract companies to that park.”

Other growing industries include health care and social services, according to Ohio Labor Market officials. And in the immediate area, the community has seen strong growth in the professional services industry, primarily in insurance, Peters said. Local businesses such as Code Blue and Assurant are still hiring through 2013.

“We’re doing a lot of strategic analysis right now to help us understand where our core strengths in the community are,” Hobbs said.

Besides advanced manufacturing, Hobbs highlighted the potential for growth in the defense industry. There is potential for manufacturing and research in Unmanned Aerial Vehicles and systems.

“This isn’t new from an industry perspective, but for us we have to differentiate our community from others, and we have to do it innovatively and we have to be focused,” Hobbs said, saying the city’s multiple industrial parks are a great investment.

Hobbs cited Nextedge as well as Airpark Ohio as places that will help diversify the area — in defense, research and development and data centers.

The latest park, Prime Ohio II, is expected to progress in 2013, with a county water line project coming up in spring.

“That park is critical for providing opportunities on (Interstate) 70, one of our core assets. We’re getting a lot of looks on that park,” Hobbs said.

Franzen said as local officials focus on infrastructure, both in the parks and around the city, it will keep the area moving forward.

“Even in these difficult times there’s been a continual investment in our community’s infrastructure through housing, through the hospital project, the new park, downtown streetscapes, bridges and Buck Creek,” Franzen said. “I don’t believe we’ve peaked yet, we’ve just started to build momentum.”

In 2013, the city is looking on focusing on converting a block of Fountain Avenue to two-way traffic and completing streetscape improvements up to Veteran’s Bridge.

Local officials face the challenge of dwindling opportunities for project funding.

“The earmark days seem to be over,” said Franzen. “A lot of programs utilized earmarks. We used to clean up brownfields with funding through Clean Ohio.”

The city currently is having some trouble locating funding to help build a downtown parking garage, for example, but Franzen remains confident.

“We do a good job in this community of figuring out where the programs are and putting together a strategy to pursue it,” Franzen said.

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