Q ua r t er ly S n a p sho t
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1 Q ua r t er ly S n a p sho t Spring City Phoenixville Downingtown Coatesville Malvern Parkesburg West Chester Kennett Square Oxford West Grove Major Advanced Materials & Diversified Manufacturing Employers Major Cities West Grove Kennett Square April - June 2012
2 I n dus t r y Clus t e r s O v e r v i e w As shown in Table 1, the Chester County Workforce Investment Area (WIA) experienced over-the-year employment growth in the Advanced Materials & Diversified Manufacturing (AMDM), Building & Construction (BC), Business & Financial Services (BFS), Energy (ENGY), Health Care (HC) and Information & Communication Services (ICS) industry clusters. Agriculture & Food Production (AFP), BFS, Bio-Medical (BM) and ICS all have a national location quotient (LQ) greater than the state s national LQ (Table 3), and are the real backbone of the WIA s economy. Table 1: Industry Cluster Statistics for Chester County WIA (2nd Quarter 2011) AFP AMDM BC BFS BM ED ENGY HC ICS LT LWP Area Employment 10,398 10,351 11,613 41,253 6,871 23,897 1,609 27,359 17,754 4,136 1,359 Percent Area Employment 4.36% 4.34% 4.87% 17.29% 2.88% 10.02% 0.67% 11.47% 7.44% 1.73% 0.57% Employment Growth (Q Q2 2011) , Annual Average Wage ($) 38,016 67,989 58,064 92, ,347 43,958 83,727 52, ,214 46,991 48,655 National Location Quotient (Q2 2011) Glossary for Tables 1-4 AFP AMDM BC BFS BM ED ENGY HC ICS LT LWP Agriculture & Food Production Advanced Materials & Diversified Manufacturing Building & Construction Business & Financial Services Bio-Medical Education Energy Health Care Information & Communication Services Logistics & Transportation Lumber, Wood & Paper LQ Location Quotient: A measure of an industry s concentration in an area relative to the rest of the nation. It compares an industry s share of local employment with its share of national employment and assesses an industry s competitiveness. If the location quotient is greater than 1.00, that industry exports the majority of its goods and services to another area and is considered competitive. If the location quotient is less than 1.00, it is considered a local cluster and the majority of goods and services are used in the local market. 2
3 I n dus t r y Clus t e r s O v e r v i e w Table 2: Industry Cluster Statistics for SEPA (2nd Quarter 2011) AFP AMDM BC BFS BM ED ENGY HC ICS LT LWP SEPA Employment 36,939 64,805 73, ,159 42, ,314 17, ,431 80,619 31,080 9,304 Percent SEPA Employment 2.06% 3.61% 4.11% 15.00% 2.37% 11.83% 0.96% 15.91% 4.49% 1.73% 0.52% Employment Growth (Q Q2 2011) ,834-2,618-1, , Annual Average Wage ($) 44,763 64,299 61,566 81, ,831 49,762 85,728 53,695 87,946 47,501 59,910 National Location Quotient (Q2 2011) To provide some perspective, these same cluster statistics can be found in Table 2 for the Southeast Pennsylvania (SEPA) region, which consists of Bucks, Chester, Delaware, Montgomery and Philadelphia counties. Over-theyear, this region has experienced some significant decreases in employment in many of the clusters, but there are a few bright spots with growth in AFP, AMDM, BFS, ENGY and HC. With the exception of Education (ED), ENGY and HC, the Chester County WIA has an equal or greater national LQ than the SEPA region. This is rather significant to mention considering the SEPA region also includes Chester County employment. An interesting thing to note is that while the WIA employs more than one-quarter of the AFP workforce for the region, the average wage in the WIA is significantly lower than the SEPA average. It is the lowest-paying cluster within the WIA, and the only cluster in the WIA that does not pay more than the statewide annual average (Table 3). Table 3: Industry Cluster Statistics for the State (2nd Quarter 2011) AFP AMDM BC BFS BM ED ENGY HC ICS LT LWP Statewide Employment (in thousands) Annual Average Wage ($) 42,193 54,493 51,477 66,843 90,409 43,582 73,094 49,018 74,613 43,245 45,690 National Location Quotient (Q2 2011)
4 The AMDM cluster includes nearly all durable goods manufacturing industries and a number of non-durable goods industries. Workers in this cluster make various products used by consumers and businesses. For closer evaluation, the AMDM cluster is broken out into five sub-clusters: Chemical, Rubber and Plastics; Electronics; Metals and Metal Fabrication; Printing; and Vehicle and Vehicle Equipment. Major technological advances have changed the nature of manufacturing nationwide. Although automation and other technological changes have resulted in the loss of many manual jobs over time, the demand for high skilled workers has increased. The highest levels of AMDM employment in the state are found in southeastern PA, and employment is growing in Chester County WIA. Compared to the nation, the WIA has an LQ of Table 4: Statistics for AMDM Cluster in Chester County WIA Employer Units (Q2 2011) 291 Number of Jobs (Q2 2011) 10,351 Percent of Total Jobs (Q2 2011) 4.34% Average Annual Wage 2010 $67,989 Net Change in Job Volume (Q Q2 2011) 247 Q National Location Quotient (LQ) 0.95 Percent Change from Q National LQ -1.71% Figure 1 Figure 2 Total AMDM Employment by County AMDM Percent Employment by County <5,000 5,000-10,000 10,001-15,000 >15,000 <4.0% % % >7.0% Maps reflect data from 2nd Quarter
5 Table 5: AMDM s Top 5 Industries in 2nd Quarter 2011 By Employment By Most Competitive LQ 1 Printing 1 Small Electrical Appliance Manufacturing 2 Aircraft Manufacturing 2 Software & Other Recorded CD, Tape & Record Reproducing 3 Iron & Steel Mills & Ferroalloy Manufacturing 3 Telephone Apparatus Manufacturing 4 Telephone Apparatus Manufacturing 4 Steel Wire Drawing 5 Other Motor Vehicle Parts Manufacturing 5 Iron & Steel Mills & Ferroalloy Manufacturing In addition to looking at the change in employment, shift/share analysis helps evaluate the significance of that change by removing predictable factors. Shift/Share looks at the National Industry Share (NS), Local Industry Mix (IM) and Net Change (NC) to derive the area s Competitive Component (CC) in employment. Figure 3 depicts the shift/share analysis of the AMDM industry cluster. The formula to derive the Competitive Component is: CC = NC - NS - IM NC is the change in employment. (2nd Quarter 2010 to 2nd Quarter 2011) NS is the predicted change in employment over the time period based on the national employment for all industries. IM is the predicted change in employment over the time period based on the national employment in the cluster. Figure 3: National Shift/Share Analysis of AMDM in Chester County WIA Local Industry Mix (323) Competitive Component (-176 = ) Employment 2nd Quarter 2011 (10,351) Employment 2nd Quarter 2010 (10,104) National Industry Share (100) Net Change (247) 5
6 In this example, we can see that the overall national economy was up slightly from 2nd Quarter 2010 to 2nd Quarter 2011, and all other things being equal, the cluster would have gained 100 jobs if it followed the national average. At the same time, AMDM in the nation grew moderately and would have accounted for an increase of 323 jobs. So, while the area gained 247 jobs, the region had a small CC that actually accounted for a decrease of 176 jobs. This analysis cannot, however, explain why the area is less competitive, as numerous factors could be the causation of the regional advantage; geography, infrastructure, individual employers, tax policies, educational institutions, etc. This is also only a snapshot between two time periods and not a trend analysis, so the CC may fluctuate greatly when evaluating it over different time periods. Table 6: WIA Employment of 2011 Statewide High-Priority Occupations in AMDM Statewide AMDM High Priority Occupations Chester County WIA Employment SOC Code SOC Title Estimated 2008 Projected 2018 Percent Change Annual Openings General & Operations Managers 1,830 1, % Industrial Production Managers % Industrial Engineers % Mechanical Drafters % Electro-Mechanical Technicians % Industrial Engineering Technicians % Sales Representatives 4,420 4, % Customer Service Representatives 5,130 5, % Production, Planning & Expediting Clerks % Shipping, Receiving & Traffic Clerks 1,150 1, % Supervisors - Mechanics, Installers & Repairers % Industrial Machinery Mechanics % Maintenance & Repair Workers, General 1,940 1, % Maintenance Workers, Machinery % Supervisors - Production & Operating Workers 1,070 1, % Electrical & Electronic Equipment Assemblers % Team Assemblers 1,190 1, % Computer-Controlled Machine Tool Operators, Metal & Plastic % Numerical Tool & Process Control Programmers N/A N/A N/A N/A Extruding & Drawing Machine Oprs, Metal & Plastic % Cutting, Punching & Press Machine Oprs, Metal & Plastic % Machinists % Molding & Casting Machine Oprs, Metal & Plastic % Multiple Machine Tool Oprs, Metal & Plastic % Tool & Die Makers % Welders, Cutters, Solderers & Brazers % Inspectors, Testers, Sorters, Samplers & Weighers % Industrial Truck & Tractor Operators % 15 6
7 The 2011 statewide High-Priority Occupations (HPOs) within the AMDM cluster are shown on the previous page in Table 6. These 28 occupations are considered to be in demand by employers, have higher skill needs and likely provide family-sustaining wages. The employment data listed for the occupations are for all industries, including AMDM, in the Chester County WIA. In this area, only one out of every seven of the statewide AMDM HPOs is expected to experience employment growth through 2018 and combined they will account for 556 annual openings. Table 7 lists the top AMDM occupations by employment in Pennsylvania. Eight of the occupations listed appear in the HPO list in Table 6. The 10 occupations account for approximately 38 percent of all employment in the AMDM cluster statewide. With a statewide 2010 annual average wage of $54,493, the AMDM cluster has the fifth highest average annual wage out of PA s 11 industry clusters. Six of the occupations listed below pay more than the current family-sustaining wage in PA ($31,008). Table 7: Top 10 AMDM Occupations by Employment in PA SOC Code SOC Title 2010 Cluster Employment 2011 Occupational Wage Team Assemblers 18,580 $30, Machinists 13,794 $38, Supervisors - Production & Operating Workers 13,456 $56, Helpers--Production Workers 10,598 $25, Inspectors, Testers, Sorters, Samplers & Weighers 8,928 $36, Welders, Cutters, Solderers & Brazers 8,886 $34, Cutting, Punching & Press Machine Oprs, Metal & Plastic 8,884 $31, Laborers & Freight, Stock & Material Movers 7,482 $28, Sales Representatives 6,892 $63, Electrical & Electronic Equipment Assemblers 6,854 $30,215 Center for Workforce Information & Analysis 7
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