Economic & Workforce Briefing

And, The Winners Are...

What private sector industries add to our region’s competitive edge?

We selected industries in the 16–county area covered by Pennsylvania Business Central that met the following criteria:

• Substantial—The industry employed more than 500 workers in the region during 2008.
• Concentrated in the region—The industries employed a larger share of the region’s total workers than the same industry did at the national level.
• Growing—The industry posted job increases between 2005 and 2008.
• Beating national and industry employment trends—The industry grew jobs between 2005 and 2008 at a faster rate than the entire national economy, as a whole, and than the industry itself in the entire nation. This job growth advantage could be due to regional firms having superior technology, management, or market access, or the regional labor force having higher productivity or lower wages.

Just six industries in the region’s private sector meet all four of these conditions. Four of them are manufacturing industries. Two are transportation and warehousing industries. They employed just 5.2% of the workforce in 1.9% of the establishments in the region in 2008. But, they flex a lot of muscle in the regional economy.

Ranked by order of impact on our region’s competitive edge, the six industries are: warehousing and storage; paper manufacturing; fabricated metal manufacturing; pipeline transportation; computer and electronic product manufacturing; and primary metal manufacturing. Taken together, the average pay to workers in these six industries was 45% higher than the average pay in all industries in the region and 9% higher than the average pay received by all workers in the nation.

Warehousing and storage facilities store and secure general merchandise, refrigerated goods, and other warehouse products. They might also provide logistics services, including labeling, inventory control and management, light assembly, order entry and fulfillment, packaging, “pick and pack” activities, price marking and ticketing, and transportation arrangement. Many of the firms in this industry are small, self–storage facilities. However, large volume firms in this sector include Walgreen Eastern Company and United States Cold Storage in Northampton County, Warnaco Inc. and Forward Logistics, LLC in Blair County, Penn Centre Logistics in Centre County, and Wal–Mart Stores in several locations in the region.

Paper manufacturers make pulp, paper, or converted paper products. Among the major players in the region are Appleton Papers in Blair County, First Quality Tissue Paper in Clinton County, New Ngc in Union County, McLean Packaging and Georgia Pacific in Northampton County, and Menasha Packaging in Westmoreland County.

Firms in the fabricated metal industries transform metal into intermediate or end products. Important fabricated metal processes are forging, stamping, bending, forming, and machining that are used to shape individual pieces of metal. Also included are other processes, such as welding and assembling, used to join separate parts together.

Companies in pipeline transportation use transmission pipelines to transport products, such as crude oil, natural gas, refined petroleum products, and slurry. Dominion Transmission and Columbia Gas Transmission are major players in the region in this industry.

Establishments that manufacture computer and electronic products also manufacture computer peripherals, communications equipment, and similar electronic products. Some company names in this sector include L-3 Communications in Lycoming County, General Dynamics Satcom Techs in Centre County, and Fci USA in Huntingdon County.

Primary metal manufacturers smelt and refine ferrous and nonferrous metals from ore, pig or scrap, using electrometallurgical and other process metallurgical techniques. They also manufacture metal alloys and superalloys by introducing other chemical elements to pure metals. The output of smelting and refining, usually in ingot form, is used in rolling, drawing, and extruding operations to make sheet, strip, bar, rod, or wire, and in molten form to make castings and other basic metal products. Some primary manufacturers in the region include a variety of firms in Westmoreland County (e.g., Rolls Technology, Allegheny Ludlum, Alcoa) as well as Coastal Aluminum Rolling Mills in Lycoming County and Standard Forged Products in Cambria County.

We have mentioned only a few of the firms involved in these six industries that lead our region’s competitive edge. One of these regional industries, warehousing and storage, is especially strong, growing, and healthy in the economy of the entire nation. Several, notably paper manufacturing and primary metal manufacturing, seem to be prospering in our region much better than in the rest of the country.