Rejuvenating Mass. production

Manufacturing finding an even keel in state

Many in Massachusetts have given manufacturing up for dead, a relic of a bygone era when textile mills and metalworking factories hummed from Holyoke to New Bedford, unperturbed by the distant drumbeat of armies of low-cost Chinese and Mexican laborers.

But after decades of job losses and plant shutdowns, a report scheduled to be released at a Boston Foundation forum this morning concludes that the state's industrial sector has begun to stabilize and is expanding its output as a share of the gross state product.

While scores of old-line manufacturers have gone out of business over the past three decades, the survivors, mostly privately held companies, still employ nearly 300,000 workers. And they've adapted their products, upgraded their technology, built efficient supply chains, and are capitalizing on the weak dollar to sell worldwide in fields ranging from machine tools and leather goods to medical and defense gear.

In a high-profile example of the resurgence, designer menswear producer Joseph Abboud Manufacturing Co. yesterday outlined plans to export tailored suits, sports coats, and dress pants made in its New Bedford factory to new retail outlets in China.

"The conventional wisdom has manufacturing all but extinct in Massachusetts," said Barry Bluestone, professor of political economy at Northeastern University and one of the authors of the study. "The fact is manufacturing is a growing share of the state's economy. It's doing exactly the opposite of what the conventional wisdom suggests."

Manufacturing boosted its share of the gross state product, the value of goods and services produced in Massachusetts, from 10.9 percent in 1997 to 13.3 percent in 2006, according to the report, titled "Staying Power: The Future of Manufacturing in Massachusetts."

In the same period, the state's manufacturing output increased 60 percent, twice as fast as industrial output nationally.

Manufacturing productivity in the state also accelerated faster than productivity in the state economy as a whole - 8 percent compared to 1.9 percent in 2006, the most recent year for which data could be collected.

"We need to be more efficient every day," said Michael Tamasi, president of Boston Centerless Inc., a family-owned metalworking company with plants in Woburn and Avon, who was interviewed for the report. "We're competing in the global market. We have to give 100 percent quality and 100 percent on-time delivery."

The report, to be presented at a forum before Lieutenant Governor Tim Murray and other state officials, was cosponsored by the Boston Foundation, a nonprofit organization; the Massachusetts Manufacturing Extension Partnership, a training group; and the Massachusetts Alliance for Economic Development, a business-government partnership.

It traces a long-term erosion in state manufacturing jobs from more than 800,000 at its World War II peak to about 296,000 today, as competition mounted first from low-wage southern states and then from countries with cheaper labor.

Looking forward, the report projects continued, though smaller, declines in coming years, leaving the state with 268,000 manufacturing workers in 2016 if current trends persist.

But with the value of the dollar dropping against foreign currencies, making it cheaper for customers abroad to buy American products, Bluestone said Massachusetts has an opportunity to reverse the job losses by making smart investments in traditional manufacturing as well as in the rising high-tech and life sciences sectors that have commanded more attention from state government. These could range from job training grants to tax breaks for plants and equipment.

"The employment decline is slowing dramatically," Bluestone said. "It's possible, if we play our cards right, we may stabilize employment in the manufacturing sector when the economy starts to recover in the next couple of years."

Because most factories have an aging workforce, as many as 100,000 employees are expected to retire in the next 10 years, creating job openings for those with a vocational education, Bluestone said. One of the challenges for the state's high schools and community colleges in the coming decade, he said, is to make sure a new generation of students is prepared to enter the manufacturing workforce.

Manufacturers interviewed for the study reported a variety of strategies to offset their cost handicap against foreign competitors.

Some took advantage of state tax credits to build plants and install new machinery. Others updated their product lines or developed their own brands rather than relying on contract manufacturing.

Boston Centerless, by hiring professional managers and refocusing on a smaller group of core customers, has doubled its sales and increased its Massachusetts payroll from 90 to 153 in the past four years. "We need to get some recognition and respect from the state, and we need some assistance as well," Tamasi said.

Bill Davaney, vice president of sales at Valkyrie Co., which employs 60 workers at its Worcester plant, has launched and expanded its own brand of Abas leather handbags and wallets sold at Nordstrom and other high-end department stores. Its also set up a venture with another company to make baseball gloves in Worcester.

"I think there are a lot of people who recognize the value of 'Made in America' again," Davaney said.

Robert Weisman can be reached at weisman@globe.com.