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Report: Energy Boom Igniting US Urban Manufacturing Through 2020

By Ideas Lab Staff March 24, 2014

From 2010 through 2012, energy intensive manufacturing sectors added more than 196,000 jobs and increased real sales by $124 billion in the nation’s major cities.

Cheap energy will power a jobs surge in U.S. manufacturing through the year 2020, with 72 percent of those jobs going to metropolitan areas, according to a new report.

Over the last three years, metro area manufacturing employment has grown by an average annual rate of 1.7 percent, said the report titled, “Impact of the Manufacturing Renaissance from Energy Intensive Sources,” compiled by IHS Global Insight for the U.S. Conference of Mayors.  The report says cheap natural gas has ignited the steel, iron, fabricated metals and machinery manufacturing industries as well as those of plastic, rubber, resin and organic chemicals.

“We believe the energy revolution is helping the U.S. regain its footing in the manufacturing sector,” said Lansing, MI Mayor Virg Bernero, Chair of the U.S. Conference of Mayors Advanced Manufacturing Task Force. “Most of these manufacturing jobs will occur in our cities and their metropolitan regions, which we know are the drivers of the national economy.”

From 2010 through 2012, energy intensive manufacturing sectors added more than 196,000 jobs and increased real sales by $124 billion in the nation’s major cities, the report said.

In 2012, metro areas accounted for greater than 78 percent of the total employment 82 percent of the real sales across all energy-intensive manufacturing industries.  Fabricated metals lead the sector in total employment with 1.14 million jobs, a 9.8 percent increase during the three-year period covered by the report.

Chicago comes out a big winner in the report, leading all metro areas in employment for the Fabricated Metals, Plastic and Rubber manufacturing and Iron and Steel sectors.

Houston leads all metro areas in jobs in the Machinery sector, which is expected to reach 69,591 by 2020, a 3.4 percent annual increase from today’s employment figure of 53,377.

“This report underscores that manufacturing has been critical in helping the national economy rebound from the recession, especially in metropolitan areas,” said Waterbury, CT Mayor Neil O’Leary, vice chairman of the Manufacturing Task Force.  “We are energized to see that employment in this area will continue to grow, which means new jobs locally in our cities,” he said.

The expansion of these manufacturing sectors is directly attributable to the unconventional shale plays, the report says.  “This competitive advantage, combined with additional exploration and global economic growth should lead to extra capacity, increased production and sales and overall job growth across the energy intensive industries… lower costs will make U.S. produced goods more attractive to both domestic and foreign buyers,” the report says, “and should act to improve the trade balance.”