It's been a tough year for Illinois manufacturers

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By Mark Fitton

Illinois News Network

SPRINGFIELD — Noting some hard numbers from November, Illinois manufacturers say they’re watching Springfield for decisions on taxes and spending as they keep battling in a worldwide marketplace.

While Illinois gained a few jobs in November, they weren’t in manufacturing.

Although the state added about 400 jobs in November, the unemployment rate rose 0.3 percentage points to 5.7 percent, according to the Illinois Department of Employment Security. That compares to a national rate of 5.0 percent for the same period.

Jeff Mays, director of IDES, said the increase in the unemployment rate was attributable to more people entering the labor force to look for work.

And while the department noted all non-farm employment was up year-to-year with a job gain of about 35,700, manufacturing jobs continued to lag.

Manufacturing showed a year-to-year job loss of about 12,800 jobs.

“Illinois’ average job growth since the employment recovery began in January 2010 remains below the national average, and employment will not recover from the 2007-2009 recession until January 2017,” according to IDES analysts.

“The manufacturing and mining industries continue to hemorrhage middle class jobs, while our neighboring states continue to grow,” said Jim Schultz, director of the Illinois Department of Commerce and Economic Opportunity. “We need to significantly reform our state’s business climate if we want to reverse the flow of manufacturing jobs out of Illinois and start growing again.”

“It’s been a challenging year,” said Mark Denzler, vice president of the Illinois Manufacturers Association. 

“I think the big thing that manufacturers and actually all Illinois residents would like to see is stability and predictability,” Denzler said. “It’s very hard for a business today to make long-term plans for investing in Illinois or expanding in Illinois if they don’t know that the future holds.”

Denzler and other business leaders cited not only Illinois’ unresolved budget impasse and the tax implications that could arise from it, but a need for answers from the General Assembly on questions including tax credits for manufacturers’ research and development projects and on major purchases.

“It's a tough environment in Illinois,” said Steve Rauschenberger, president of the Technology & Manufacturing Association. “One of the problems we’re concerned with is that policymakers don’t understand that manufacturing today is competitive across the world.”

While Illinois manufacturers certainly compete with other Midwestern makers, they also compete with manufacturers in countries including Mexico and China, he said.

“Costs that a manufacturer has to deal with end up in his product,” Rauschenberger said. He cited property taxes. Drive one part of manufacturer’s cost too high, the product becomes over-priced in relation to its competition, “and you don’t win those bids.”

The slow-growing economy also means small- and medium-sized manufacturers that survived The Great Recession are hesitant to add jobs unless they know demand will likely sustain those positions, said Kim Maisch, Illinois director for the National Federation of Independent Business.

“It’s not that things are horrible, but many small business owners are very afraid to put on jobs they may not need. They don’t want to get caught like that again after they’ve seen so many fellow business owners go out of business,” Maisch said.

Manufacturers concerns about the economy may be well founded.

“Measures of consumer attitudes and sentiment have weakened in recent months,” the state’s
Commission on Government Forecasting and Accountability noted in its November report.

There’s some fear the nation’s manufacturing sector is already in recession and, “in Illinois, many face the prospects of higher property taxes as well as the prospect that any state budget solution may necessitate higher state income taxes, while in Cook County they will face a sharp increase in sales and a myriad of other taxes,” the commission reported.

These are rough days, but Illinois’ manufacturing sector is hardly ready to throw in the towel, Denzler said.

“You hope for a home run now and again, occasionally get a single or a double and you keep your head down and keep moving forward — that’s what manufacturers do,” he said.

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