Massachusetts Export Center

 

Worcester Business Journal

 

Look Up For Falling Currency,
Down For Rising Fuel
Crunch for oil and workers could complicate
manufacturing orders

 

December 24, 2007
By Kenneth J. St. Onge

Special to the Worcester Business Journal

 

It's perhaps one of the most positive trends manufacturing insiders see coming over the next year, especially for Central Massachusetts factories. 


"The dollar's deterioration has affected our economy pretty well here, particularly for exports to European countries," said Jack Healy of the Manufacturing Extension Partnership in Worcester. "When your price falls, you are below the competition."

Although Bay State exports showed robust growth in 2007, they lagged slightly from the year before. Overall, exports grew about 9 percent from 2005 to 2006, and about 6 percent since then, according to state data. Exports to European countries, however, doubled that growth figure.

 

Last year, machinery and electronic equipment continued to be the Bay State's largest export, with $5.2 billion worth of goods flowing overseas and growing at a 14 percent annual clip. Exports of medical devices and instruments grew 6 percent to just under $5 billion. Industrial machinery exports climbed 5 percent to $3.3 billion.
 

The shrinking dollar, which hit a record low of $1.48 against the Euro last month, should help accelerate that trend, particularly among smaller manufacturers that are just now getting into exporting their products, said Julia Dvorko of the Massachusetts Export Center in Worcester.

 

"Everyone I know is optimistic about it," Dvorko said. "The companies I work with are reporting 15 to 20 percent growth in international sales."

Headwall Photonics of Fitchburg, which makes scientific and industrial devices called spectrometers, is one of the more recent manufacturers to expand its sales into overseas markets. In October, Headwall inked a deal with a European partner to boost its sales in France and Italy, which "represent key areas of business growth for Headwall," said David Bannon, vice president of sales and marketing.


Labor Woes

Of course, it's difficult to make anything without workers. And the shortage of those skilled in manufacturing, particularly on computer-based factory equipment, will continue to be a bothersome hurdle for local companies as they struggle to plug holes in their shrunken, aging workforce.

 

"That's the biggest problem - finding skilled machinists," said Kerstin Forrester of Stonebridge Corp. in Worcester. "When I look at what's happening at the (Worcester Vocational School), for instance, it's hard to be very optimistic because there are no seniors, no juniors only some sophomores and freshmen learning the machinists' trade."

Demographics deserve a big part of the blame, and 2008 could prove a watershed year. Late 2007 saw the retirement of the first member of the "baby boomer" generation, and with an impending exodus of skilled workers from the manufacturing trade, competition for workers will heighten.

"If you took a look at many manufacturing firms, the average age is over 50," said Healy of MEP.                  

 

Kenneth J. St. Onge is a freelance writer based in Connecticut and a Worcester native.

 

 

 


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