Reuters has recently reported that energy-related manufacturing jobs in the U.S. are set of a big increase in the next six years, and city folk are the ones who are going to be capitalizing on them most.
The Best Indicator of Future Results is Past Behavior
In very general terms, how an industry has performed in the recent past tends to be a fairly good indication of how it will perform in the next several years. Of course, this can’t be taken as 100%, as industries rise and fall all the time and depend on far more than just its past performance. But if a specific industry has continued to show growth each year for the past, say, five years, it’s a reasonable expectation that it will continue to grow in the next five.
With that in mind, the U.S. Conference of Mayors has said that jobs in the energy sector have increased by an average of 1.7 percent each year over the last three years in metropolitan areas (196,000 jobs between 2010 to 2012); Reuters predicts that manufacturing in this area will continue to grow at a rate of more than 1 percent year year through 2020.
Where the Strength Lies
The key here is twofold: energy sector jobs are showing the strongest growth in metropolitan areas, and the surge in employment is due to a natural gas boom.
Around a generation ago, manufacturing jobs tended to be in semi-urban cities, with factories being built there and jobs expanding outward to create a thriving town. This was because there was more space to work with, and costs were lower than in cities. Today, though, the landscape of manufacturing has changed to a more diversified, sophisticated industry, and metropolitan areas are better equipped to deal with the changes; there’s also a bigger pool of people and workers to choose from.
As for the areas of specialization within the energy industry, the top ones that have benefited from the gas boom are steel, iron, fabricated metals, and machinery. Reuters reports that in those four areas, job growth in metropolitan areas increased the most at 9 to 10 percent between 2010 and 2012.
Reasons for the Growth
As mentioned above, containing the bulk of energy manufacturing in metropolitan areas has the widest selection of people to choose from, but that’s not the only reason jobs have grown so much in the last three years.
The influx of money from these areas has enabled corporations to start up their own training programs, leading to both a greater number of workers and existing workers becoming highly skilled and proficient. In turn, this has led to more jobs, as well as higher profits from the skilled workers being able to perform at a higher level.
Lastly, the natural gas boom also reflects savings from not having to rely on overseas energy as much, with shipping costs being much higher than transporting it within the country. The money saved can therefore be funneled back to corporations within the country, as opposed to having to spend it on taxes and tariffs.