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A smaller manufacturing sector takes shape in the city

If the local manufacturing scene was a shell of its former self in 1990, when it accounted for 268,500 jobs, today it’s more like a shard. In the subsequent two decades, the sector shed an average of 10,000 jobs per year, falling to 90,000 workers in 2009. Since then the plummet has tapered off, but a continued erosion whittled the headcount to 72,000 in August.

Still, the sector’s remaining companies are surprisingly optimistic, at least on a statewide basis. New York manufacturers report that order totals and general business conditions have improved since late 2016, according to the October release of the Empire State Manufacturing Survey from the Federal Reserve Bank of New York. The firms also expect to make capital expenditures and hire more employees in the next six months. The survey results might reflect that the contemporary manufacturing base is no longer dominated by a few major players.

“The companies making commodity products that could locate anywhere are gone,” said Adam Friedman, executive director of the Pratt Center for Community Development, a Brooklyn-based advocacy and technical-assistance organization. “The vast majority of the companies we see have under 10 people. What’s stayed in New York City is design-oriented companies that can adapt to market change because they’re relatively small and high-end.”

That’s the case for most of the manufacturers rooted in the Brooklyn Navy Yard, where work spaces in the industrial complex have been sliced up into small chunks. The average size of a manufacturing space there is between 3,000 and 4,000 square feet, said David Ehrenberg, president and chief executive of the yard’s development corporation. The industrial park has grown to more than 400 tenants, and the 1 million square feet of space that opened last year is 90% occupied. Expansion will continue as the Navy Yard seeks to accommodate high demand, thanks to rents of around $20 per square foot.

Manufacturers also face the challenge of making their jobs appealing to qualified employees.”There’s a skills gap, but there’s also a perception gap,” said Ben Margolis, executive director at Southwest Brooklyn Industrial Development Corp., an advocacy organization for businesses in Gowanus, Red Hook and Sunset Park. “Maybe there’s a perception that industrial work equals sweatshops. We want to change the image of the industry for the next generation of New Yorkers—especially those coming out of school. The industrial sector really is dynamic in New York.”

Read the full article in Crain’s.