Small manufacturers continue to ride the recession wave
For most Americans, towering smokestacks, blocks of row housing for factory workers and men lining up to punch time clocks are scenes out of old newsreels.
Today, products bearing the “Made in the U.S.A.” label are fewer and further between. The Internet has made the world a virtual global marketplace and industrial revolutions in poorer countries have made it more attractive for American mega-companies to manufacture a cheaper, but American manufacturers say, not a better product overseas.
In the Hudson Valley, much of the emphasis has been on attracting  “clean, green and lean” manufacturing, focusing efforts in luring biotech, pharmaceutical and semiconductor industries to the area.
Yet the region is awash with many small, independent companies, a few spun off after IBM”™s massive downsizing in the 1980s, and others that have had longstanding relationships with multinational firms which have outsourced some manufacturing overseas but have kept other components that go into the finished product stateside.
Business for independent manufacturers varies by sector, said Harold King, executive director of the Newburgh-based Council of Industry. “If you”™re making building materials, things are a lot slower than you want them to be. But if your line is in automotive parts, health care, medical devices or solar panels and in-kind components, you are relatively busy. A common theme our member manufacturers share is that they now work from quarter to quarter rather than year to year.  Most are leery of investing long-term because they don”™t know what”™s around the corner,” King said.
Since the stock market collapse in 2008, “Whenever market conditions start to look good, they start to look bad again,” he said. “Until manufacturers see more consistent, positive trends, they aren”™t going to be willing to invest in building their businesses.”
A recent Empire State Manufacturing Survey conducted by the Federal Reserve Bank bear out those observations. According to its October report, “Business conditions remain weak … while future indexes generally indicated an expectation that conditions would improve in the months ahead, the level of optimism remains relatively low.”
“We have seen some of the products outsourced to other countries coming back to the states,” King said. “Part of that is due to rising costs with doing business in China and the increase in shipping costs. I don”™t know how long it will last, but it”™s good to see some manufacturing coming back.”
King, whose nonprofit Council of Industry lobbies for members in Albany, said there”™s a general appreciation for what transpired in the 2011-2012 budget put together under the new governor. “(Andrew) Cuomo took it seriously and dispensed with the usual gimmicks. He showed some leadership. He seems sincere in wanting to bring business back to New York and make it easier to do so.
“On the surface, the regional economic councils seem to be a good idea,” King said, “but it remains to be seen what change will take place as a result. New York is a very expensive place to do business, with many regulations that don”™t make sense and inhibit, rather than promote, growth. We need some pro-growth incentives and a simpler tax structure. There is a growing undercurrent of anger out there about the tax system.”