Kansas Advanced Manufacturing

Transcription

1 2008 Kansas Advanced Manufacturing Center for Economic Development and Business Research W. Frank Barton School of Business Wichita State University August

2 Kansas Advanced Manufacturing Summary of Findings The Center for Economic Development and Business Research, W. Frank Barton School of Business, Wichita State University was given the task of analyzing various industry clusters in the state of Kansas. The objective in doing the analysis is to analyze historical employment trends, identify strengths and weaknesses within the industry cluster, identify future occupational needs of the cluster and identify employers perceptions of the current workforce supply. Notable findings are listed below: The Advanced Manufacturing cluster in Kansas comprised over 15 percent of all jobs in the state in Wages supplied to Advanced Manufacturing employees comprised over 19 percent of all wages in the state of Kansas in The average annual wage of a manufacturing employee in 2006 in the state of Kansas was $43,197 which is 8.1 percent above the average annual wage in the U.S. Transportation Equipment Manufacturing is the largest industry within the Advanced Manufacturing cluster with over 41,000 employees statewide. Sedgwick County employed 28.5 percent of all manufacturing employees in 2006 with over 50,000 employed. By 2014, 49,500 employees will be needed in the various Advanced Manufacturing industries. In general, the Advanced Manufacturing cluster is strongest in the Northeastern, South Central and Southeastern portions of the state of Kansas. Kansas is rivaled in industry concentration compared to the U.S. by Iowa and Arkansas. Arkansas and Iowa are both strongest in the food manufacturing industry, while Kansas is strongest in the transportation manufacturing industry. The Advanced Manufacturing cluster will need employees at all levels of education. The most predominate occupations needed by 2014 include supervisors and managers, engineers and technicians. In general, Advanced Manufacturers felt that hiring qualified employees with the correct skill sets had become more difficult compared to five years ago. 2

3 Kansas Advanced Manufacturing Defined Advanced Manufacturing refers to a variety of industries involved in the physical transformation, production or development of a material into a new, tangible product. This CLUSTER includes a variety of products from fertilizer to composite materials. The cluster is defined by the North American Industrial Classification System as sectors Kansas Strengths Transportation Equipment The transportation equipment sector employs more than any other sector in manufacturing, 41,045 individuals in This sector is composed of automobile and motor vehicle parts, aerospace products and parts, and ships and boats. The largest employer in Kansas, Cessna Aircraft Co., is included in the transportation equipment sector. Food The food manufacturing sector is composed of industries whose primary purpose is to transform agricultural and livestock products into a final good. Food manufacturing is the second largest sector in manufacturing when measured by employment, with 30,804 employees in Two of the largest employers in Kansas are Cargill Meat Solutions and Tyson Fresh Meats. Key Locations The number of manufacturing employees is largest in Sedgwick County, Johnson County and Wyandotte County, respectively. The highest average annual wage and the largest number of manufacturing establishments are in Sedgwick County. The top two growth sectors in manufacturing from 2001 to 2006 in Kansas include furniture and related product manufacturing and primary metal product manufacturing. Each experienced more than 1,00o new employees over five years. 3

4 What s next for Advanced Manufacturing? Advanced Manufacturing is an important industry of the Kansas economy. Advanced manufacturing companies supplied 15.4 percent of all employees in the Kansas economy in Nationally, advanced manufacturing supplied 11.4 percent of all employees. The average annual wage for all industries in the United States in 2006 was $39,965. The average annual manufacturing wage in the state of Kansas in 2006 was $43,197. Nationally, the manufacturing industry is expected to decrease in total employment from 2006 to 2016 by 10.6 percent. Manufacturing in Kansas is expected to increase from 2004 to 2014 by an estimated 12.3 percent, or a 16,500 position increase. However, the total openings through 2014 are expected to surpass 49,500 positions due to employee turnover and retirement. One of the largest challenges facing the industry is and will be the supply of qualified workers within the manufacturing industry. The occupations with the largest concentration of positions in manufacturing in 2004 included team assemblers, slaughterers and meat packers, and first-line supervisors/managers of production and operating workers. These positions do not, currently, require formal education or certificate programs. These occupations instead require on-the-job training or work experience in related occupations. As the baby boomers leave the workforce, it will not only be difficult to find skilled employees, but also to train new employees in these non education-based occupations. Manufacturing as a Percent of Total, Kansas and U.S. 18.0% 16.0% 17.1% 16.3% 15.8% 15.5% 15.9% 15.4% 14.0% 12.0% 10.0% 13.9% 12.8% 12.5% 12.0% 11.8% 11.4% KS US Source: County Business Patterns, U.S. Census Bureau,

5 Kansas Advanced Manufacturing Cluster Statistics (2006) Number of Establishments 3,165 Number of Jobs 176,444 Percent of All Kansas Jobs 15.4% Average Annual Manufacturing Wage $43,197 Total Manufacturing Wages Paid $7.6 billion Level Change in Total Wages Paid from 2001 $320.2 million Percent Change in Total Wages Paid from % Industry Concentration 1.36 Source: County Business Patterns, U.S. Census Bureau, Top Five Advanced Manufacturing Industry Sectors Rank Industry Sector Employed Percent of Manuf. 1 Transportation Equipment 41, % 2 Food 30, % 3 Machinery 19, % 4 Fabricated Metal Products 16, % 5 Plastics and Rubber Products 12, % Balance of Advanced Manufacturing 56, % Kansas Advanced Manufacturing 176, % Source: County Business Patterns, U.S. Census Bureau, Top Five Advanced Manufacturing Counties by Rank County Employed Percent of Manuf. 1 Sedgwick 50, % 2 Johnson 19, % 3 Wyandotte 12, % 4 Shawnee 6, % 5 Ford 6, % Balance of Advanced Manufacturing 81, % Kansas Advanced Manufacturing 176, % Source: County Business Patterns, U.S. Census Bureau,

6 Kansas Advanced Manufacturing Industry Levels Industry 2006 Percentage of Manufacturing Manufacturing 176, % Transportation Equipment Manufacturing 41, % Food Manufacturing 30, % Machinery Manufacturing 19, % Fabricated Metal Products Manufacturing 16, % Plastics and Rubber Products Manufacturing 12, % Printing and Related Support Activities 10, % Chemical Manufacturing 6, % Nonmetallic Mineral Products Manufacturing 6, % Furniture and Related Products Manufacturing 6, % Computer and Electronic Products Manufacturing 5, % Miscellaneous Manufacturing 4, % Electrical Equipment, Appliance, and Component Manufacturing 4, % Paper Manufacturing 2, % Wood Products Manufacturing % Primary Metal Manufacturing 2, % Petroleum and Coal Products Manufacturing 1, % Textile Product Mills 1, % Beverage and Tobacco Products Manufacturing % Apparel Manufacturing % Textile Mills % Leather and Allied Products Manufacturing % Source: County Business Patterns, U.S. Census Bureau, Kansas Advanced Manufacturing Industry Distribution Industries with less than 5% but more than 1% of all Manufacturing Employees 26% Transportation Equipment 23% Printing and Related Support Activities 6% Plastics and Rubber Products 7% Fabricated Metal Products 9% Machinery 11% Food 18% 6

7 and Wages Kansas Advanced Manufacturing

8 and Wages Kansas Advanced Manufacturing

9 Summary of Kansas Advanced Manufacturing Industry Sectors by Total Industry Industry Concentration* Number of Establishments Total Wages Paid ($1,000's) Average Annual Wage All Advanced Manufacturing 176, ,165 $7,621,873 $43,197 Transportation Equipment 41, $2,460,212 $59,939 Food 30, $987,885 $32,070 Machinery 19, $820,257 $42,432 Fabricated Metal Products 16, $571,988 $35,720 Plastics and Rubber Products 12, $475,385 $38,387 Printing and Related Support Activities 10, $364,121 $34,491 Chemical 6, $363,477 $53,896 Nonmetallic Mineral Products 6, $261,565 $42,059 Furniture and Related Products 6, $182,173 $29,973 Computer and Electronic Products 5, $315,848 $53,039 Miscellaneous 4, $163,236 $33,457 Electrical Equipment, Appliance, and Component 4, $184,259 $42,174 Paper 2, $109,544 $40,038 Wood Products 2, $73,693 $29,524 Primary Metal 2, $84,138 $36,758 Petroleum and Coal Products 1, $124,790 $68,229 Textile Product Mills 1, $28,806 $24,227 Beverage and Tobacco Products $25,353 $46,180 Apparel $13,877 $26,183 Textile Mills NA NA Leather and Allied Products NA NA Source: County Business Patterns, U.S. Census Bureau, *Industry Concentration refers to the industry concentration in Kansas versus the industry concentration in the U.S. A value above 1 indicates a stronger concentration in Kansas than that of the U.S. A value equal to 1 indicates the same level of concentration in Kansas versus the U.S. A value below 1 indicates a weaker concentration in Kansas versus that of the U.S. Bolded industries indicate industries with average annual wages above that of the U.S. annual average wage of $39,965. 9

10 5 Key Occupations The Occupational Alignment used in this portion of the analysis is based on the Kansas Department of Labor s Occupational Outlook and degree completions obtained through the Kansas Board of Regents. An Index (in bold) was calculated based strictly on economic criteria. Equal weights were given to four criteria including the Median Annual Wage, Base Year (2004), Total Openings (2004 to 2014) and the Additional Training Needed. Indices can range from 0 to 4. The larger the index value, the higher the economic impact the occupation has in Kansas. Below are three charts listing various Advanced Manufacturing Occupations. The first table illustrates employment needs at all education levels. The second table illustrates employment needs for bachelor degree holders. The third table illustrates employment needs for technical education, certificate programs and associate degree holders. It is important to keep in mind that occupations were ranked based on the calculated index mentioned above and the occupational openings DO NOT include current shortages. Occupational Alignment, Advanced Manufacturing, All Education Levels Median Annual Wage (2004) Base Year (2004) Projected Year (2014) Total Openings (2004 to 2014) Total Number Needed to Be Trained Additional Trained Workers Needed Occupational Title Educational Attainment Total Completers Training Leakage Index 1. General and Operations Managers Bach + $69,243 2,329 2, % 1, Industrial Production Managers Work Rel. Occ. $78,749 1,582 1, % Sales Representatives, Wholesale and Manufacturing, Except Technical and Scientific Products Moderate $50,981 2,984 3,303 1, % First-Line Supervisors/Managers of Production and Operating Workers Work Rel. Occ. $44,637 6,179 7,064 2, % Chief Executives Bach + $112, %

11 Occupational Alignment, Advanced Manufacturing, Bachelor s Degree ONLY Educational Attainment Median Annual Wage (2004) Base Year (2004) Projected Year (2014) Total Openings (2004 to 2014) Total Completers Training Leakage Total Number Needed to Be Trained Additional Trained Workers Needed Occupational Title Index 1. Computer Software Engineers, Systems Software Bachelor's $74, % Computer Systems Analysts Bachelor's $62, % Computer Hardware Engineers Bachelor's $77, % Electrical Engineers Bachelor's $65, % Industrial Engineers Bachelor's $62,962 1,744 2, % 1, Occupational Alignment, Advanced Manufacturing, Technical Education or Associate s Degree Median Annual Wage (2004) Base Year (2004) Projected Year (2014) Total Openings (2004 to 2014) Total Number Needed to Be Trained Additional Trained Workers Needed Occupational Title Educational Attainment Total Completers Training Leakage Index 1. Mechanical Drafters Postsecondary $39, % Electrical and Electronic Engineering Technicians Associate $47, % Industrial Engineering Technicians Associate $42, % Mechanical Engineering Technicians Associate $42, % Electrical and Electronics Repairers, Commercial and Industrial Equipment Postsecondary $42, %

12 Available Workforce as Perceived by Cluster Industry Leaders The Docking Institute of Public Affairs interviewed leaders from advanced manufacturing companies in the State of Kansas on May 12 and May 23, 2008, EXCLUDING any aerospace and defense and motor vehicle companies, which will be featured in subsequent reports. Employers with the largest workforces were targeted for interviewing. Twenty interviews were completed. Interviews were designed to assess industry leaders perceptions of strengths and weaknesses of their cluster s workforce quality and supply in Kansas, types of training on basic and industryspecific skills most needed among new hires, and anticipated growth in cluster workforce needs over the next 10 to 15 years. Occupational Segmentation as Perceived by Industry Leaders Advanced Manufacturing Workers Clerical and Office Staff 12% White-Collar Professionals 11% Low- and Semi-Skilled Blue-Collar 57% Engineers, Designers, Others 4% High-Skilled Blue-Collar 16% 12

13 Job Categories Job Categories Kansas Advanced Manufacturing 2008 Supply of Workers by Skill Level Advanced Manufacturing - Supply of Workers Low- and Semi-Skilled Blue-Collar High-Skilled Blue-Collar Abundant Supply Adequate Supply Small Shortage Large Shortage Engineers, Designers, Others White-Collar Professionals Clerical and Office Staff Number of Respondents Ease of Hiring by Skill Level Advanced Manufacturing - Ease in Hiring Good Workers Compared to 5 Years Ago Low- and Semi-Skilled Blue-Collar High-Skilled Blue-Collar Easier About the Same More Difficult Engineers, Designers, Others White-Collar Professionals Clerical and Office Staff Number of Respondents 13

14 Education Levels Kansas Advanced Manufacturing 2008 Preparation of New Hires Advanced Manufacturing - Preparation of New Hires Coming to Work with... With Advanced Degree Leaving College Very Prepared Somewhat Prepared Not Prepared Leaving CC/Tech School Leaving High School Number of Respondents Skill Sets Needed Thinking of skills or skill sets needed at the workplace, are there certain skills that seem to lack or that could be improved upon? High School Graduates 1. Fundamental Reading/Writing Skills 2. Fundamental Mathematical Skills 3. Fundamental Keyboarding/Computing Skills 4. Shop Class/Trade Skills-Welding, Design 5. Work Ethic/ Willingness to Learn Community College or Technical School Graduates 1. Fundamental Reading/Writing Skills 2. Fundamental Mathematical Skills 3. Fundamental Keyboarding/Computing Skills 4. Interpersonal Communication Skills 5. Work Ethic/Company Loyalty Four Year, Advanced, and Specialized Degree Holders 1. Practical Application of Education 2. Fundamental Mathematical Skills 3. Software Knowledge/Experience 4. Interpersonal Communication Skills 5. Work Ethic/Company Loyalty Training Needs Public Education Might Address When thinking about new AND current workers, do you have industryspecific training needs that the public education system might appropriately address? 1. Basic Keyboarding/Computer Skills 2. Knowledge of Purchase Orders and Invoices 3. AutoCad 4. English as a Second Language 5. General Clerical Skills 6. Manual Press and Molding 7. Industrial Fiberglass Arts 8. Professional Etiquette 14

15 Definition of Terms Cluster refers to the concentration of employment within a given industry or industry sector within a given region. Industry Concentration refers to the concentration of employment within a given area relative to the United States. Industry Concentrations were calculated by dividing a given area s percentage of employment within a given industry, relative to all employees, by the nation s percentage of employment within a given industry, relative to all employees in the nation. An industry concentration above one implies a strong or high potential industry concentration within the given area; a low industry concentration implies a weak or low potential industry concentration within the given area. Educational Attainment refers to the required level of education needed to obtain a job in the respective occupational code. Total Openings refers to the total number of job openings from turnover and from occupational growth in the respective occupational code. Total Completers refers to the expected number of instructional program completers attributable to the respective occupation from 2004 to This analysis assumes a constant annual rate of instructional program completers based 0n 2006 completer numbers obtained through the Kansas Board of Regents. Training Leakage refers to the number of program completers that are not expected to work in Kansas six-months after degree completion. Total Number Needing to Be Trained refers to the number of program completers needed to fill all job openings from 2004 to 2014 in the respective occupation. Additional Trained Workers Needed is the difference between the Total Number Needing to Be Trained and Total Completers. 15