The Philadelphia region is experiencing a resurgence in the manufacturing industry.
“We’re seeing a significant uptick and interest in this region by current manufacturers who want to expand here and those that seek to come here,” Robert Wonderling, president and CEO of the Greater Philadelphia Chamber of Commerce, said during a meeting with The Philadelphia Tribune editorial board.
Chamber officials say Philadelphia’s location and plentiful source of natural gas are significant factors in attracting manufacturers to the region.
“When you’re producing a fertilizer or a plastic or a composite material, the fuel bill is a very important, expensive part of the business. To be able to have gas get here economically is an attraction,” said Wonderling.
The focus on the attractiveness of the region’s natural gas source comes at a time when Philadelphia Gas Works faces privatization.
The chamber has been highlighting how the region has attracted companies that manufacture goods and export them internationally.
“The reality in a lot of segments now is manufacturing in China is losing favorability and its now about insourcing manufacturing back to the U.S. Pennsylvania, the greater Philadelphia region and the city is really well-positioned to take advantage of this, because of the proximity to the largest population centers in the country,” said Chamber Chairman Daniel Fitzpatrick.
He said there are about 700 current job openings in Philadelphia for manufacturing companies that cut metal or produce parts for medical devices. Fitzpatrick said after 10 years on the job, workers could make an average wage of $65,000.
Fitzpatrick noted that the majority of manufacturing is done by middle market companies, firms that employ approximately 100 workers and have revenues of about $50 million.
“The fact is that manufacturing has changed very dramatically in the last 40 years. The job skills are different,” Fitzpatrick pointed out.
To that end, the chamber seeks to work with the School District of Philadelphia to ensure that students are adequately trained for new career opportunities in the industrial economy.
“What we want to do is grow the economy on that front end, and tap into the great people that we have in Philadelphia,” said Fitzpatrick.
The chamber has partnered with the city of Philadelphia, the African American Chamber of Commerce, the Hispanic Chamber of Commerce, the Center City District and local community development corporations to work on a strategy for job growth.
This job growth strategy could be impacted by the possible sale of PGW and a change in tax policies.
“One, if you’re going to have a one-time asset sale that one-time proceed should go to release the unfunded pension liability obligation which really compresses the city’s budget. Two, we really want to see tax policy that springs forward from property taxes as opposed to wage and business privilege taxes,” Wonderling said.
The chamber has advocated for lower business privilege and wage taxes for more than 15 years.
Wonderling says the combination of selling PGW, the city’s new property assessment plan and taking another two to three percent out of the city’s cost structure could help reduce business privilege and wage taxes.
“If we combine them all together, it will send a strong message to young people who are trying to start a company here to stay here (and) make suburban companies to take another look at Philly,” he added.
The chamber officials offered their views on how the city’s business community is faring during the Tribune’s editorial board meeting.
“The businesses are doing fairly well. We’re in a two percent growth economy. I think there are pockets that are doing better as certain types of businesses come back from places like China to places like Pennsylvania,” said Fitzpatrick.
However, he noted that many businesses are planning to put their investments plans on hold until they know what the outcome of the fiscal cliff.
“The next level of investment is on hold until they know what the tax policy is going to be so they can be planning. It’s a wait and see as far as that next capital investment,” said Fitzpatrick.
The chamber represents about 5,000 member companies across the 11 county region.