|
Connecticut's industrial machinery
& equipment industry (SIC 35) has been a
major component of the State's
manufacturing sector for many
years. The industry's
share of total
State manufacturing
employment,
having ranged
from 11% to
13% over the
years from
1987 to 1993,
is second
highest to the transportation equipment manufacturing
industry (SIC 37). How
has this industry performed over
time in Connecticut? In this brief
analysis, we will examine and
compare Connecticut and United States
levels of machinery industry
employment, establishments,
output, exports, and productivity.
Employment
Between 1987 and 1993,
machinery industry employment
declined by 10.2% in Connecticut,
and 8.8% at the United States
level, pulled down equally by
mix and competitive pressures.
Employment losses
occurred among both small
and large businesses; 64.7%
of employment losses occurred
among establishments
with 100 or more employees.
Connecticut's industry
employment mix differs from
the United States, with much greater reliance on computers and office
machinery (SIC 357) which
accounted for 28% of the state
total compared with 13% for the
United States. Connecticut has much less dependence
on the production
of construction
equipment (SIC 353), 1% compared with
10% for the United States, and farm equipment
(SIC 352), less than 1% compared with 5% for the United States.
Thus, the United States distribution
among the subgroups is more
evenly spread.
Employment distribution by
employment size of establishment
remained stable from 1987 to
1993, although more than 60% of
all industry employment is found
in large firms (employment >100).
Among firms with employment
less than 100, employment
distribution varied very little
between 1987 and 1993.
Overall, State employment
change in the industrial machinery
industry has been similar to
the change in national employment,
first exceeding, then
lagging the United States.
Establishments
Net establishment formation
in Connecticut was down 9.9% between 1987 and 1993 as the
number of businesses declined
from 1,415 to 1,275, a loss of 140
businesses. During the same
period net establishment formation
in the United States was up 2.7% with
a gain of 1,425 establishments.
Connecticut's manufacturing
is more heavily concentrated in
industrial machinery and equipment.
One fifth of all manufacturing
industry establishments
are in the industrial machinery &
equipment group in Connecticut,
while the United States has about 14%.
Connecticut also has led the United States
substantially (33% compared
with 21%) in the
percentage of metalworking
machinery establishments (SIC
354). For all other subgroups,
Connecticut's distribution of
establishments is very similar to
the national percentages.
Exports
Connecticut's exports of
industrial machinery and equipment
increased from $687 million
in 1988 to $825 million in 1995,
with an annual average growth rate of 2.6%, while the United States
posted a higher growth of 9.4%
for the same period. If State
exports had grown at the same
rate as for the United States, we would
have had an additional $460
million in exports in 1995. The
Connecticut share of United States exports
in the machinery industry has
ranged from a high of nearly
1.4% in 1989 to a low of 0.7% in 1994, averaging 1.0% from
1987 to 1995.
Primary destinations of
Connecticut's machinery and
computer exports are
Canada, the United Kingdom,
Japan, and Germany.
Canada accounted for onefourth
of this industry's total
exports, up from $146.2
million in 1988 to $208.6
million in 1995. However the
largest rate of growth from 1988 to 1995 occurred with
respect to Brazil where exports
increased 210% from $6.7 million
to $20.8 million, or roughly onetenth
Canadian exports.
In 1995, industrial machinery
ranked second only to transportation
equipment in the total
dollar value of Connecticut
exports. Further perspective can
be found in the Department of
Economic and Community
Development's quarterly and
annual export report series.
Output
Between 1977 and 1992
Connecticut's machinery industry
gross state product grew at an
annual rate of 0.2%, only a
fraction of the national rate of
1.8%. In other words,
Connecticut's output lagged
behind the national level during
this time frame. An alternative
method of measuring growth is to
index the values. By comparing
all subsequent values to the 1977
level, the index shows Connecticut
output lagging the national
level from 1977 to 1986. After a United States downturn in 1986, nationwide
machinery industry output
again took off at a faster rate than
in Connecticut.
Productivity
Overall productivity (output/
hours) is almost identical at the
state and national level although
there is noticeable variation at the
industry subgroup level. For
instance, Connecticut led in
engines & turbines (SIC 351),
special industry machinery (SIC 355) and industrial machinery,
n.e.c. (SIC 359), but
trailed in metalworking
machinery (SIC 354) and
general industry machinery
(SIC 356), compared with the
national levels based on 1987
& 1992 data from the Census
of Manufactures. Connecticut's
rate of capital investment
(capital investment/output)
was only one percent higher
than the national rate in
1987, and 1.2% more than the United States level in 1992.
Forecast
An employment forecast calls for
continued decline at both the
state and national levels
through at least 2005; Connecticut
machinery industry
employment (relative to 1969)
will continue to lag the United States
with the differences increasing over time.
Conclusion
Thus far, analysis has been
completed for industrial machinery
& equipment (SIC 35) and
electronic and other electronic
equipment (SIC 36). This type of
analysis will be replicated for
other industry clusters as we
endeavor to examine all facets of
industry performance.
The Connecticut Department
of Economic and Community
Development announced that
Connecticut communities authorized
683 new housing units in
November 1996, a 8.4% decrease
compared to October 1996 when
746 were authorized.
The Department further
indicated that the 683 units
permitted in November 1996
represent an increase of 12.2%
from the 609 units permitted in
November 1995, and that the
year-to-date permits are down
7.6%, from 7,713 in 1995 to
7,125 in 1996.
Reports from municipal
officials throughout the state
indicate that New London County
showed the greatest percentage
increase in November compared
to the same month a year ago:
65.9%. Middlesex County reported
the greatest percentage
decline: 34.4% for the same
period.
Hartford County documented
the largest number of new,
authorized units in November
with 181. Fairfield County
followed with 149 units and New
Haven County had 129 units.
Manchester led all Connecticut communities with 62 units,
followed by Stamford with 44
and New Haven with 25.
Year-to-date totals indicate
that Hartford County has
issued the most building
permits through November of
1996 with 1,639, followed by
Fairfield county with 1,485,
and New Haven County with
1,418. Stamford authorized
292 new units during this
period, followed by
Southington with 172, Shelton
with 156, and Waterford with
155.
Are you concerned about a
qualified labor force for business and industry in your region?
Does your job include planning or
administration for vocational and
technical education? Do you have
to identify educational programs
for students or trainees? If you
answered "yes" to any of these
questions, the Occupational
Information System (OIS) was
designed for you. The Occupational Information System is a
computerized system that will
enable you to do your research
quickly and easily and will increase
the efficiency and accuracy
of your decisions.
The job of analyzing labor
markets to identify a
potential imbalance in the
work force, and interpreting the
causes of any imbalance, is as much an
art as a science. The nature of a labor
market sometimes precludes a
precise answer to one's questions.
Even if all the relevant data were
collected, there is no simple way to
determine which are the most
influential factors. Occupational
information cannot provide a
planner with simple quantitative
indicators such as "30 additional
people need to be trained for
occupation X." However, as more
and more information of the right
type becomes available, our ability
to make connections, draw conclusions
and answer our questions
improves. When data items from
multiple sources are considered
together, they may indicate a
pattern from which we can draw
an informed conclusion. If you
find confirming evidence from
multiple items, and understand
the constraints on each, a coherent
picture of the labor market
conditions begins to emerge. Good
results come from knowing the
structure of the local economy,
understanding its past trends, and
sensing the important variables at
work. Combined with data from
the Occupational Information System, this background provides
a basis for informed intuition.
Informed intuition requires the
planner's judgment, reason, and
experience. Input from advisory
groups should supplement these
skills. Occupational information is
the remaining component in the
process of making informed decisions.
The computerized Occupational Information System uses
objective data to support an overall
planning process. The key to that
process is still the individual
planner. The information system
contributes to your efforts as you
plan new programs or evaluate
existing ones, explore opportunities
for on-the-job training, or
respond to the labor force needs of
a new or expanding firm. In
general, using the Occupational Information System in a systematic
process increases your ability
to meet the future needs of the
labor market and saves you time
and energy.
In Connecticut, there are
currently two options for the Occupational Information System:
the Micro-OIS and the Occupational Information System c/s.
The Micro-OIS is a stand-alone
version for IBM-compatible computers
which was initially developed
in 1985 by the Western
Occupational Research Corporation
(WORC) under contract from
the National Occupational Information
Coordinating Committee
(NOICC). It has since been revised
and updated several times. In
1995, a Windows version of the
Micro-OIS was developed by the
Utah Department of Labor and its
State Occupational Information
Coordinating Committee (SOICC).
This version is currently being
used in over 100 sites across
Connecticut. The Occupational Information System c/s is the
client/server version of the Occupational Information System,
residing on a server in the Central
Office of the Labor Department.
Users access it via a personal
computer connected to the
Department's wide area network.
It was developed by Fu Associates
in Virginia and is being pilot-tested
at three Job Centers in Connecticut.
For more information on the
Occupational Information System, contact Carol Bridges,
State Occupational Information
Coordinating Committee, Labor Department, Office
of Research, 200 Folly Brook
Boulevard, Wethersfield, CT
06109.
The Occupational Information System is especially useful for:
- Economic developers who examine the labor market and determine where growth is likely to occur and use that information for
focusing their efforts.
- Program planners who need to understand the current and future labor market and the training programs that can help meet labor
market needs.
- Counselors and other service providers who work with students and job seekers and wish to identify occupations with good
employment outlook and related training opportunities for those occupations.
- Businesses that need to look at the availability of an adequate workforce and training resources for new and current staff.
There are a number of advantages to using the Occupational Information System:
- The Occupational Information System can provide, in one location and one operation, information from a variety of resources.
- The Occupational Information System provides projections of future employment developed by the Department of Labor, Office of Research, using standard
models and including projections for employment by industry and for employment in different occupations.
- A computerized Occupational Information System can do a selective search to help you find items with special characteristics.
- The Occupational Information System contains a built-in crosswalk between different classification systems, such as the Occupational Employment Statistics
(OES), the Dictionary of Occupational Titles (DOT), and the Classification of Instructional Programs (CIP) coding systems. The Occupational Information System
combines the codes from these different classification systems thus making it easier to analyze related information.
- Occupations and programs are clustered so you can work with your target occupation and related occupations at the same time.
(Material adapted from Unlocking the
Power of Occupational Information,
Occupational Information System (OIS)
Casebook, NOICC, Wash. DC, July 1996)
Connecticut's coincident
employment index moved,once again, to its highest level in
the current recovery with the
release of the (preliminary) October
data, having not fallen on a
month-to-month basis since
December 1995. Connecticut's
leading employment index backed
off its near peak last month,
although still remaining higher
than October a year ago.
We asked in our last commentary
with the release of the September
data whether the Connecticut
economy could continue to
prosper. The coincident index is
still sending strong positive signals.
The leading index has been
stuck in neutral for almost two
years. We still wait for the leading
index to shift into gear. Will it be
drive or reverse? The data from
future months will provide the
answer.
The coincident index, a gauge
of current employment activity,
continued its strong upward
momentum. This recent momentum
reflects in large part the lower insured unemployment rate, down
15.3 percent over the last 12
months. But it also reflects higher
total employment, up 3.3 percent,
and higher nonfarm employment,
up 1.0 percent. Lastly, the total
unemployment rate contributed a
bit to the positive momentum,
down 2.0 percent over the last
year.
The leading index, a barometer
of future employment activity, has
bounced around considerably
since reaching a peak in December
1994. It has not moved in the
same direction, either up or down,
for more than two consecutive
months since then. Which components
have contributed to its ups,
and which to its downs? On the
plus side, the short-duration (less
than 15 weeks) unemployment
rate fell by 13.8 percent and the
initial claims for unemployment
insurance fell by 11.9 percent
since December 1994, both significant
movements. On the negative
side, Hartford help-wanted advertising
fell by 12.5 percent, total
housing permits declined by 5.1 percent, and the average work
week in manufacturing production
workers dropped by 1.6 percent.
The coincident employment
index rose from 83.5 in October
1995 to 89.1 in October 1996. All
four index components continued
to point in a positive direction on a
year-over-year basis with higher
nonfarm employment, higher total
employment, a lower total unemployment
rate, and a lower insured
unemployment rate.
The leading employment index
rose from 87.5 in October 1995 to
88.9 in October 1996. Four of the
five index components sent positive
signals on a year-over-year
basis with lower initial claims for
unemployment insurance, a lower
short-duration (less than 15
weeks) unemployment rate, higher
Hartford help-wanted advertising,
and higher total housing permits.
The final component sent a negative
signal on a year-over-year
basis with a lower average work
week of manufacturing production
workers.
Source: Connecticut Center for Economic Analysis, University of Connecticut. Developed by Pami Dua [(203) 322-3466,
Stamford Campus (on leave)] and Stephen M. Miller [(860) 486-3853, Storrs Campus]. Tara Blois [(860) 486-4752, Storrs
Campus] provided research support.
Return to Top
|