In a weak economy,
there's a couple of Jacksonville truisms we can always count on.
One is that the Jacksonville labor market will hold up better
than the rest of the country.
The second is that the service sector will be responsible for
keeping the Jacksonville economy up.
Well, hold on a second. Things are a little bit different this
time around.
Yes, Jacksonville is still doing better than the rest of the
country, with a lower unemployment rate and higher job growth than
the rest of Florida and the nation. And yes, the service sector is
helping with a modest 0.8 percent annual job growth rate in a tough
economic climate.
But this time, it's the blue-collar jobs that are really keeping
the local economy going. The latest available data show that
Jacksonville-area construction jobs were increasing at an annual
rate of 6.2 percent in September and manufacturing jobs were growing
by 0.8 percent.
That may not seem like an impressive increase in manufacturing.
But at a time when the nation is losing manufacturing jobs at a 4.5
percent annual rate and the state of Florida is losing them at a 4.0
percent rate, economic analysts see the manufacturing sector as a
source of strength in the local economy now. And in an area known
mainly for attracting call centers and other back-office operations,
manufacturing is becoming more important.
"Forty six to 47 percent of our current economic development
prospects are in manufacturing," said Jerry Mallot, executive vice
president of the Jacksonville Chamber of Commerce.
"Knowledge of our marketplace has been helping bring more
opportunities to us," he said.
Jacksonville's lure
Analysts and business executives cite several factors that
attract manufacturing operations to the Jacksonville area. One is
transportation, with the confluence of the port, railroads and the
interstate highway system making it easy to ship goods in and out of
the area.
"It [Jacksonville] had the best site we looked at," said Art
Wilson, director of administration for C.F. Gomma USA Inc., which
makes rubber-based components for the automotive industry. The
Italy-based company is relocating its U.S. headquarters from Indiana
to Jacksonville and expects toits Westside facility this
month, with plans to eventually employ 250 people.
Wilson said the company needed port access because it gets much
of its components from Europe. And it needed highway access because
90 percent of its finished products are shipped out by truck. With
Interstates 95 and 10 intersecting in Jacksonville and Interstate 75
a short drive away, the Jacksonville site fit the bill.
A second factor attracting manufacturers to Jacksonville is the
relatively low cost of doing business, compared with other parts of
the country.
Kaman Aerospace Corp., which employs about 50 people in
Jacksonville, is planning to relocate to an expanded Jacksonville
plant that could employ up to 500 people, as it closes a plant at
its home base in Connecticut. Kaman officials would not comment on
why they want to expand in Jacksonville, but First Union Corp.
economist Mark Vitner said the cost savings of doing business in
Jacksonville, compared with Connecticut, was likely a large factor.
"The difference is just enormous," Vitner said.
A third major factor is a community that is generally receptive
to new businesses bringing jobs to the area.
"The business climate in Jacksonville is very friendly," said Don
Kingston, executive vice president of Glasfloss Industries Inc., a
maker of air filtration products thatd a plant at the
Jacksonville International Tradeport in September.
"You really can't underestimate that pro-business attitude,"
Vitner said.
The climate is considered so favorable that Expansion Management
magazine in January named Jacksonville its "hottest" U.S. city for
manufacturing expansions and relocations.
 |
C.F. Gomma Corp., an
Italy-based manufacturer, is relocating its U.S. headquarters
from Indiana to Jacksonville. Its new plant in Westside will
make automotive brake hoses in a renovated 160,000-square-foot
building starting this month.
-- John
Pemberton/staff
|
"We do have all the ingredients
companies want to have," Mallot said.
Kirk Wendland, executive director of the Jacksonville Economic
Development Council, said, "We feel any job we can compete for,
we've got a great opportunity to get them."
Investment
Economic development officials will tell you that it is worth the
effort to provide a good climate for manufacturers, including
economic incentives to build or expand facilities.
"Jobs in manufacturing contribute disproportionally to the
betterment of the economy," said Jacksonville City Councilman Lad
Daniels, who is also president of the First Coast Manufacturers
Association.
According to First Coast Manufacturers data, manufacturing jobs
paid on average 25 percent higher than the average for all jobs in
Northeast Florida in 2001. And while manufacturing jobs only
accounted for 8 percent of all employment last year, they accounted
for 13.5 percent of the area's gross regional product.
Another advantage of manufacturing plants is stability, Wendland
said.
A large service operation like a call center can be shut down
more easily than a factory that has installed a lot of heavy
machinery.
"They bring a fair amount of capital investment with them,"
Wendland said. "They are tougher to pick up and move."
Is it just luck?
While Jacksonville continues to attract new manufacturing jobs
and the data for the area look good, compared with other cities,
Jacksonville's recent increase in manufacturing employment can be
considered something of a fluke.
"In some ways, Jacksonville's been very good and very lucky,"
Vitner said.
John Godfrey, chief economist at Florida Economic Associates,
said, "It's the absence of things that are declining statewide."
Basically, Jacksonville has benefited by not having some of the
cyclical industries that lost jobs in the recent recession.
Statewide, the biggest manufacturing job losses have come in
electronic equipment, which has declined by 4,700 jobs, or 8.1
percent, in the 12 months through September.
That may explain why the Melbourne/Titusville/Palm Bay
metropolitan area, which has more high-tech jobs than Jacksonville,
has had a 9.3 percent drop in manufacturing employment, the biggest
lost of manufacturing jobs of any Florida metro area in the last 12
months (The labor data provided by the Florida Agency for Workforce
Innovation does not break down electronic equipment job data for the
metropolitan areas.)
Of course, Jacksonville didn't see as big a benefit in jobs from
the high-tech boom of the 1990s.
"We miss some of that on the upswing, but we avoid some of the
job losses on the downside," Godfrey said.
Lynn Reaser, chief economist at Banc of America Capital Markets,
said, "Jacksonville seems to be more dependent on niche players in
various parts of the economy."
"The diversification of the economy has helped it," she said.
For example, food processing is one industry that is somewhat
resistant to economic cycles. Two food processing businesses in
Jacksonville, Beaver Street Fisheries Inc. and Ryan Foods LLC,
recently have announced plans to expand their plants.
Jacksonville's biggest manufacturer, with about 2,400 jobs, is
contact lens maker Vistakon Inc., which also tends to be
recession-resistant.
Jacksonville's manufacturing base also is benefiting from the
continued increase in home construction, despite the overall
economic slowdown, Reaser said. That's helped manufacturers such as
Florida Rock Industries Inc., which produces construction materials.
The local economy is doing so well, compared with other cities,
that economic development proponents can even see a silver lining
when the city loses out on jobs.
Jacksonville lost out last month when DaimlerChrysler decided to
put a new van plant and 3,000 jobs in Savannah, Ga. But Mallot,
noting the large number of auto supply manufacturers in
Jacksonville, said Savannah is close enough to the area that
Jacksonville may see some benefit from the plant after all.
"It creates opportunities for suppliers in our area," he said.
Staff writer Mark Basch can be reached at (904) 359-4308 or
via e-mail at mbaschjacksonville.com.
