Rhode Island ranks among the last in the nation in projected growth of technology manufacturing jobs over the next year, according to a survey by CorpTech, a Woburn, Massachusetts firm that tracks growth of emerging technology companies nationally. At 2.9 percent projected growth, Rhode Island was well behind all other states in New England, and well behind the national average of 7 percent. Only Alaska, at a projection of no growth, North Dakota at 1.4 percent growth, and West Virginia at 2.5 percent, ranked lower than Rhode Island. The survey included all 50 states, plus the District of Columbia and Puerto Rico.
The Rhode Island figures were also well below its 8.5 percent in the September 1998 survey and 4.9 percent in the September 1997 survey.
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While the outlook may seem bleak, Leonard Lardaro, an economist at the University of Rhode Island, said it shines compared to overall employment growth projections over the next year, which he estimates will be 1.5 percent.
Lardaro also points to a survey by Regional Financial Associates which has dropped Rhode Island from 48 to 49th of the 50 states in projected job growth over the next five years.
“The weird part (about the CorpTech survey),” Lardaro said, “is even though the number ranks us very low, do you celebrate” because it’s double the projected overall job growth, “or is it time to fine tune and find a niche for ourselves in the information age.” Lardaro suggested it’s time for fine tuning.
Rhode Island’s projections in the CorpTech survey placed it last in the region. Massachusetts was first with a projected jobs gain of 6.8 percent, followed by Vermont at 6 percent, New Hampshire at 5 percent, and Maine and Connecticut at 4.2 percent.
As a region, New England did not fare well either, ranking eighth among the 13 regions surveyed by CorpTech. Three regions projected double digit job growth: Northwest, 13.5 percent; Northern California, 12.4 percent; Mid-Atlantic, 12.2 percent. New England as a whole projected job growth of 6 percent.
Asked if the CorpTech survey seems accurate, Glenn S. MacNaught, president of the Newport based Aquidneck Management Associates, said it’s consistent with what he’s hearing.
“Defense work is an awful lot tighter, a lot more competitive,” said MacNaught, whose 280 employee company is primarily involved in defense related projects. And, he said, overall it appears that “people are delaying projects.
“Things are good, they’re maintaining,” he said. “The growth work doesn’t seem as strong as it was. I don’t hear people talking about layoffs.”
J. Eric Hovermale, president of McLaughlin Research Corp., a 200-employee company in Middletown and also a defense related company, agreed with MacNaught. He said in defense related companies “we’re not going to see a lot of hiring.”
But Terry Daly, chief executive officer of the Providence based Daly.com says he expects hiring to increase dramatically in the spring. He said companies had stopped buying new software while they spent an “enormous amount of services revenue” fixing the Y2K problem.
That lull, however, caused some disruptions in Daily.com’s employment. The company, which had been at 120 employees 18 months ago, ballooned to 330 in recent weeks. But as a result of the what Daly described as a lull in software purchases, the company cut back to 240 employees in a restructuring over the last couple of weeks. Daly said he expects to hire all the employees back in the spring.
Overall, CorpTech surveyed 89 Rhode Island companies of what it described as 236 Rhode Island emerging technology manufacturers, with less than 1,000 employees. The companies were in a variety of technology related fields.
Of the 89 firms surveyed, more than 42 percent said they expected to expand their work force by an average of 12.4 percent, creating 314 new jobs. More than one in six companies projects growth of more than 25 percent, the survey said.
Totally, the 89 firms anticipated increasing employment from 8,032 to 8,266. CorpTech said the small and mid-sized high-technology manufacturers in Rhode Island employ 17,311 employees.
The only industry showing a projected overall decrease in employment in Rhode Island was computer software, where 17 firms were surveyed, projecting a decrease in jobs of 3.8 percent. Chemicals was the only other area not projecting an increase, with the six companies responding suggesting employment would not change.
Telecommunications and the Internet was most bullish on job growth, with the five firms (representing 120 employees) projecting 34.2 percent growth.
In other areas the five medical companies, with 220 employees, projected 9.5 percent growth; nine factory automation companies, with 200 employees, projected 7.5 percent growth; seven environmental companies, with 240 employees, projected 2.9 percent growth; seven subassemblies and components companies, with 1,965 employees, projected 2.4 percent growth; 12 manufacturing equipment companies, with 749 employees, projected 2 percent growth; and seven advanced materials companies, with 1,385 employees, projected 0.9 percent growth.
The figures are disturbing because Rhode Island’s economic development agencies have suggested a shift in the state’s economy from manufacturing based to knowledge based, with an emphasis on growth in the computer and financial services industries.
Manufacturing jobs, which still represent nearly 80,000 Ocean State workers, have been on the decline for a number of years.
Lardaro said he’s particularly concerned “about the future for Rhode Island. We’ll go as far as the national and regional economies will pull. Our momentum is paltry,” he said, noting that unemployment in Rhode Island has been steadily rising over the last few months.
Lardaro also seemed to quibble with those who see Rhode Island’s future as a part of a regional economy.
“We’re being pulled by Massachusetts and Connecticut,” he said. “We’re making ourselves get absorbed by neighboring states, instead of setting us apart. We’re making ourselves irrelevant.”
