Viewing blog posts written by Gino DiCaro


CA industrial electricity now 79% more expensive than the U.S. average

Posted by Gino DiCaro, Vice President, Communications on June 14, 2016

California manufacturers depend on cost-competitive electricity rates to stay in business and grow their operations. Since 2010 California's energy policies have steadily driven up industry's premium to purchase electricity in the state.  The annual average in 2010 for the "industrial" rate was 44 percent higher than the national average, growing to a whopping 79 percent higher in 2015. The "commercial" rate that smaller manufacturers tend to pay has also steadily increased.  That rate was 49 percent higher than the national average in 2015.

Coupled with data that shows California has attracted no more than two percent of U.S. manufacturing investments since 2010, this information tells us that we must make sure our energy policies take into account their impacts on high-wage manufacturing growth.





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California export growth not catching up with country

Posted by Gino DiCaro, Vice President, Communications on June 10, 2016

Manufacturers know that exporting is one of the primary growth factors for any economy and that it is profitable for businesses of all sizes. According to a study published by the Institute for International Economics, U.S. companies that export not only grow faster, but are nearly 8.5 percent less likely to go out of business than non-exporting companies.

About a decade ago California, for the first time, got passed in total exports by Texas. The general slowdown in the Golden State started in 2000 but has continued over the last 15 years.  According to U.S. Department of Commerce data, we lag the country's export growth by a large margin. California was by far the export leader in the second half of the 20th century. Now 16 years into this Century we have less than 40 percent export growth compared to the rest of the country's 92 percent growth. For many reasons, other states are attracting more manufacturers who export goods. Our policymakers in California should use this as another reason to ensure we're doing all we can to attract our share of manufacturers.

 

Export growth image





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We should attract more manufacturing investments to California - 1.5% is not enough

Posted by Gino DiCaro, Vice President, Communications on May 20, 2016

In 2015, according to new data on U.S. manufacturing investments, the country’s south and midwest regions gained the most manufacturing investments.  California was dead last among the 50 states with 1.07 manufacturing investments for every one million people, equating to only 1.5 percent of total investments. 

Sadly, this is the continuation of a trend. Since the recession ended in 2010, each year California has failed to attract more than two percent of the country’s new manufacturing facilities. Manufacturing employment has also lagged the US, with a 3.3 percent growth in California compared to 7.3 percent nationally.   

If California kept pace with the national manufacturing job growth rate, we would have 50,000 more high paying manufacturing jobs today.

Kentucky has been the country’s manufacturing leader for the last two years. In 2015 they enjoyed:

  • 39 manufacturing investments per one million people
  • 7 percent of the total U.S. manufacturing investment pie with only 1.3 percent of the US population
  • 17 percent growth in manufacturing jobs since the recession

“These disappointing numbers should be a wake-up call to state leaders.  Manufacturing investments support modernization, new product development, job retention and job growth that we need,” said CMTA’s Dorothy Rothrock. “We should find ways to improve the manufacturing business climate and attract our fair share of investments.”

manufacturing investments by state 2015
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manufacturing jobs ca vs us 2010 to 2015
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Innovation in manufacturing can improve sustainability

Posted by Gino DiCaro, Vice President, Communications on May 6, 2016

A blog cross posted from the National Association of Manufacturers and Mallory Micetich:

Here’s a great example of how innovation in manufacturing can improve sustainability and our world. Exxon Mobil is investing in FuelCell Energy, a company developing technology that could reduce carbon dioxide emissions from power plants. As the New York Times reports, Exxon Mobil hopes that their relationship with FuelCell will allow them to take a promising new approach to carbon capture and sequestration “from the lab to the market.” This technology could potentially mean that power plants could “isolate and compress” CO2 “while producing enough power to more than make up for the energy cost of capturing the carbon.”

Read more about how FuelCell and Exxon Mobil’s partnership could help power plants reduce emissions.





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More pieces of the California manufacturing jobs story

Posted by Gino DiCaro, Vice President, Communications on April 15, 2016

There were some independent items worth noting in the California manufacturing employment narrative this week.

First the California Labor Market Information Department, in its monthly report this week, announced the loss of 1,600 manufacturing jobs in March. This decline brings California’s manufacturing jobs growth to 3.4 percent since the recession, while the U.S. grew its manufacturing base by 7.4 percent.

In the same week came an announcement from a southern California manufacturer, General Magnaplate, who said they would be shutting down their manufacturing facility in Ventura because of a difficult business climate and an unwarranted stormwater lawsuit against them. Magnaplate is a small manufacturer with only around 25 workers in their Ventura facility, but that means nothing to their employees who are left looking for work. The good news is that families in Texas and New Jersey will likely gain employment because the company’s facilities in those locations will pick up production. Just one example of the drips of manufacturing loss accumulating over the years in California.

With some of this bad news came good news, at least you’d think. The Advanced Energy Economy (AEE) Institute released a report this week indicating that the “Advanced energy” sector generated jobs at six times the rate of the overall California economy last year. The good news stops there. The problem is that often those jobs are coming at the expense of reduced job growth and investment in other areas of the economy.  If we are spending too much for those jobs then we incur even greater losses in the rest of the economy. The report even admits it on page 6: “California’s advanced Fuel Sector was the only segment of Advanced Energy that did not create additional jobs in 2015.  Challenged by several factors including persistently low gasoline prices, Advanced Fuels saw employment decline more than 50 percent from 2014, resulting in a loss of about 8,300 jobs.

Basically the AEE report tells us that if you raise prices on something you can get more people working on ways to reduce consumption. That is of course not a surprise. But when it comes to the entire economy, our collective data is telling us that our state is still lagging the country in manufacturing jobs and investment growth.





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