WSJ: Manufacturing Is Making It Again in New York City
Manufacturing is making a comeback in NYC, with smaller, niche companies taking the place of the behemoth factories that once outlined the skyline. New York is just one of the major cities in the US that’s seeing a resurgence of manufacturing, providing a much-needed boon to employment rates. The Wall Street Journal’s Chana Schoenberger wrote about the trend.
Per the article:
It’s hard to imagine a less-hospitable environment for manufacturing than New York City. Space is tight, real estate expensive and the cost of living too high for most people on a factory worker’s wages.
Yet after decades of decline, manufacturing in the city—often in the form of small shops—is finding a few niches where it can thrive.
About 79,000 people work in manufacturing in the New York metro area, after a loss of more than 190,000 jobs since 1990. However, the sector has shown a recent uptick; April employment was 1,300 jobs higher than a year earlier, according to the New York state Labor Department.
The new jobs aren’t found in old-style, big factories. Instead, most are being created by smaller companies that specialize in rapid production or that supply specialty or artisanal goods aimed at the luxury market. It’s part of a trend in big cities like San Francisco, Chicago and Philadelphia, where manufacturing is slowly adding jobs—or at least slowing the pace of losses.
New York’s municipal government has a number of initiatives to boost manufacturing, with modest success. The Brooklyn Navy Yard, a 200-year-old former naval base that the city turned into a manufacturing hub, is now home to 7,000 jobs; the goal is 16,000 within five years. The city sweetens the deal by subsidizing rents and operating a jobs center to help tenants hire workers, ideally from the surrounding neighborhood, which includes several housing projects. The goal: to create “high-quality, accessible middle-class jobs in manufacturing,” says David Ehrenberg, chief executive of Brooklyn Navy Yard Development Corp., which oversees the site.
Why locate a factory in New York City, instead of a cheaper, less dense locale? For some factories, it is better to be close to their local customers.
Ferra Designs Inc., a metal fabricator that makes patio furniture, staircases and lobby decorations, works closely with architects, interior designers and real-estate developers. It makes sense to be where the customers are building high-end apartment towers and hotels. “A lot of what we do is site-specific,” says founder Robert Ferraroni.
One strategy these companies are using: selling things that can’t be found anywhere else, so that they aren’t competing on price alone and can charge higher prices that allow them to weather New York City’s higher costs. Crye Precision LLC, based in Brooklyn’s Navy Yard, makes tactical gear for hunters and the military. Its 220 employees, including 200 in New York City, sew items like body armor, camouflage jackets and a new backpack for undercover agents.
Many local manufacturers are catering to initiatives by big brands and retailers to buy from U.S. suppliers. They can also provide finished goods more quickly than Asian factories that require high volumes and take weeks to deliver, at considerable shipping cost.
Dynotex Inc. has a factory in Brooklyn’s Greenpoint neighborhood, where it makes sportswear for men and women; its largest customer is a locally based retail brand, J. McLaughlin. Dynotex recently installed a digital cutting machine at a cost of $450,000 that should increase fabric-cutting speed sevenfold, lowering costs for the small orders that make up most of its business. The company had revenue of $1.2 million in 2015, says Alan Ng, chief executive officer.
Says Mr. Ng, “I believe there can be manufacturing for high-end products in the U.S., even in New York City.”
For the full article, click here.