Only Modest Jobs Gains Expected for Great Lakes Region in Fourth Quarter 2009

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Researched by Industrial Info Resources (Sugar Land, Texas)--While the economy has been showing signs of recovering from the recession that has pummeled the country since the end of 2007, the Great Lakes region is still behind the on the recovery curve. Primarily because of the woes of the automotive sector, on which the region has relied for both jobs and the economic benefits of hosting the facilities, the Great Lakes region has been slower to recover than the rest of the country. With tens of thousands of jobs lost in each state due to the automotive sector's problems alone, it is no wonder that recovery has been slow in coming. However, each quarter, new jobs are becoming available in the region as plants complete construction and become operational. During the fourth quarter of this year, 5,200 new jobs will be created, thanks to the completion of 35 plants that are now under construction.

Click on image at right for a breakdown of planned plant openings and the number of new jobs these are creating in 4Q09.

While this amount of jobs is certainly not going to save the region from current unemployment woes, it is a step in the right direction. Unemployment in the Great Lakes states is extremely high, led by Michigan, a state that has been the home of the automotive sector since the industry's inception. While new jobs have been created each quarter this year, in most quarters, the few jobs that have been created were significantly outpaced by the number of plants that closed and the amount of layoffs.

While no particular industry is grasping the reins and opening a large number of new plants in the region in the coming quarter, several industries are each opening six plants in the months of October, November or December. The Power Industry, traditionally a spending powerhouse, the Metals & Minerals Industry, the Food & Beverage Industry and the Industrial Manufacturing Industry will each begin operations of a half dozen plants in the quarter.

The largest number of new jobs will come out of the Industrial Manufacturing Industry, which will provide slightly less than 1,800 jobs. The Pharmaceuticals & Biotech Industry, with four plants beginning operation, will add 1,650 jobs to the mix, while the Metals & Minerals Industry, with 780 new jobs, is a distant third. Rounding out the top five industries creating jobs during the quarter are the Food & Beverage industry with 462 new jobs created, and the Alternative Fuels industry, which will add another 270 jobs.

Although none of the aforementioned industries are contributing significantly large numbers of jobs during the coming quarter, their respective contributions are much needed and welcome in a region begging for jobs. As capital spending begins to ramp back up next year, additional companies hopefully will determine that the Great Lakes region is worthy of future development, which should create more jobs. One of the biggest contributing factors to an increased jobs market in the region will be whether or not the automotive sector recovers from current sales woes.

If the automotive sector is able to boost sales back to 11.5 to 12 million units per year, then additional production will be required, leading to the return of at least some jobs to the region. If sales continue to remain flat, then new jobs will obviously not be forthcoming, and there is always the possibility that the automakers will need to cut back on shifts once again. However, the overall economy is showing signs of slowly recovering, and the automakers are predicting modest gains in sales for 2010, which should herald additional job availability in the Great Lakes region. In addition, a stable automotive sector will draw other industry to the region, resulting in more new jobs. The aerospace sector also has a significant presence in the Great Lakes region and has been suffering as well.

Even modest recovery in both the automotive and aircraft sectors would do much for the region's employment situation. In the coming quarter, the majority of the new plants coming online will be in the state of Illinois, a state with a heavy reliance on both the commercial and defense aircraft sectors. The largest gain of new jobs will occur in Indiana, but only by a slight margin.

We will all have to keep our eyes on this region as the early portion of 2010 develops. If capital spending continues to rise, the amount of new jobs that will also increase. If the overall economy continues to recover, then several key sectors will benefit and begin to either rehire laid-off employees or create new jobs. The next six months will be a good indicator of the direction the Great Lakes region will take, both in terms of spending and creation of jobs.

Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy related markets. For more than 26 years, Industrial Info has provided plant and project opportunity databases, market forecasts, high resolution maps, and daily industry news.