Northeastern Pennsylvania Showing Signs of Life in Manufacturing Sector

WILKES-BARRE, Pa. - Dec. 17, 2014 - PRLog -- Northeastern Pennsylvania, including the communities of Scranton, Pittston, Wilkes-Barre, and Hazleton, continues to thrive as a prime U.S. location for the manufacturing industry.  A recent study by Cleveland State University’s College of Urban Affairs provides evidence that the northeast corner of Pennsylvania is re-emerging as a viable location for manufacturing companies of all sectors.

According to the study, Northeastern Pennsylvania’s manufacturing industry will continue to grow through at least 2016.  The study indicates that manufacturing ranks first in terms of Gross Regional Product among all major sectors in the region.   This ranking includes the last 14 years and estimates for the next two years.  As recently as 2011, the GRP for manufacturing reached $5.17 billion, which is approximately a 15.7% share of all industry sectors in the area.

Two of the region’s biggest draws for manufacturing companies are its strategic location and low operating costs.  Manufacturers such as Air Products & Chemicals, Archer Daniels Midland, Fairchild Semiconductor, Graham Packaging, Hershey Company, Sanofi Pasteur, Procter & Gamble, Pepsico, Cargill, Bemis, General Dynamics, and Lockheed Martin are just some of the firms that are taking advantage of these resources.

More than 51 million people live within 200 miles of the center of Northeastern Pennsylvania. New York City, Harrisburg, and Philadelphia can all be reached in about two hours.  The area is located along what is commonly referred to as the I-81 Corridor.

In recent years, energy prices in the region have stabilized and begun trending downward due to gas exploration and drilling that comes with the Marcellus Shale Deposits in the northern part of Pennsylvania.  The huge Marcellus Shale shale formation covers an estimated 64% of the state of Pennsylvania, including the northeast region.

“Pennsylvania is working hard to ensure that the benefits of Pennsylvania energy production translate to both lower energy costs and long-term stability for our manufacturers,” said Pennsylvania Governor, Tom Corbett.  “Since the onset of shale gas production, Pennsylvania businesses and homeowners have benefited from a 50 percent decline in natural gas prices and our diverse electric generation portfolio has dropped electricity prices by an average of 40 percent. This translates into billions of dollars in annual savings for consumers — raising our competitiveness while bringing stability to long-term energy costs.”

Don Brominski, Director of Business Development for UGI Penn Natural Gas in Wilkes-Barre, PA said, “Serving Northeastern Pennsylvania, UGI Penn Natural Gas Inc. is uniquely situated in the heart of the Marcellus Shale region. Our large commercial and industrial transportation customers have access to some of the most favorably priced natural gas in the country.  Further, the abundance of supply in the region is expected to provide long term price stability, making the region a prime target for growth.”

However, natural gas is not the only energy source that has contributed to the lower cost of manufacturing in the region.

“An Analysis of Northeastern Pennsylvania as a Manufacturing Industry Location,” a study released in 2014 by Mericle Commercial Real Estate Services, shows that Pennsylvania’s average cost of electricity is the lowest when compared to surrounding states such as New Jersey, New York, Delaware, Maryland, and Connecticut.   Mericle is a privately-owned developer of industrial and office space in Northeastern Pennsylvania that boasts many manufacturers among its tenant base.

“The cost of energy is critical to manufacturing companies,” said Mericle Vice President Jim Cummings.  “Fortunately, Northeastern Pennsylvania can offer both affordable and reliable gas and electricity to industrial companies,” he said.

The availability of skilled labor is also a major factor in the resurgence of manufacturing in the region.  According to the Cleveland State University study, the Scranton/Wilkes-Barre area ranks 16th out of the nation’s top 100 metros in manufacturing employment.

One company that was drawn to Northeastern Pennsylvania by the region’s labor force is Greiner Packaging International. The Austrian-based manufacturer of packaging products for the dairy industry leases space from Mericle in an industrial building in CenterPoint Commerce & Trade Park West in Pittston Township.

Greiner Packaging International CEO Wili Eibner said, “The area’s highly regarded workforce played an important role.  There are already many skilled workers in the surrounding areas,” he said.

“We found very skilled people here,” added Greiner Group’s Global CEO Axel Kühner at the facility’s ribbon-cutting ceremony. “Any knowledge we needed we found here in the region.” He said Greiner has invested $17 million in the 113,871 square foot space and will be creating approximately 128 jobs over the next three years.

To prepare for continued industrial growth in Northeastern Pennsylvania, Mericle Commercial Real Estate Services has created its ReadyToGo! Program. Through this program, Mericle is preparing 90 sites in 11 area business parks for the immediate construction of building foundations. The company has finished 37 such sites to date.

According to Cummings, Mericle’s ReadyToGo Sites are cleared, graded, and compacted, are served by all industrial grade utilities, and have all permits and approvals in place.  “Once a company signs a lease agreement with us for a build-to-suit project on one of our ReadyToGo! Sites, we can have them in their building in nine months or less,” he said.

According to the Mericle study, the leading manufacturing sectors in Northeastern Pennsylvania as ranked by employment are Food, Fabricated Metal Products, Plastics and Rubber Products, Medical Equipment and Supplies, Printing and Related Activities, and Converted Paper Products.