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Economy and Business

Northeast Ohio manufacturing benefits in two ways from Utica drilling
Cheaper energy prices and a new demand play out in manufacturing growth

Web Editor
M.L. Schultze
Drilling rigs like this one in Carroll County are big customers for steel, and also supply the cheaper energy that are a big part of the cost of making steel.
Courtesy of FILE PHOTO
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In The Region:

The relative boom in manufacturing in Northeast Ohio over the last two years has had a lot to do with natural gas prices and infrastructure. WKSU’s M.L. Schultze has more on a new report on manufacturing that looks at what’s happened to Northeast Ohio  jobs over the last two years – and what’s likely to continue.

LISTEN: Manufacturing and the impact of Utica shale

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The report by Cleveland State University for the Manufacturing Advocacy and Growth Network says manufacturing jobs, wages, exports and regional product all grew – with the jobs at better than double the national rate.

 The report links the growth largely to two things: Exports and drilling in Eastern Ohio’s Utica Shale. It notes that places like V&M Star in Youngstown and U.S. Steel in Lorain are making materials directly for shale development. But Magnet CEO Daniel Berry says – as importantly – is what the drilling has done to natural gas prices.

“The Utica Shale is creating a demand for more steel to be used in the drilling production process: the drill bits, the pipes, the rigging for the wells. But it’s also contributing to a lower cost of energy, which reduces the cost of production.”

Berry noted, for example, that 20 percent of the cost of making steel is energy.

The report also says Utica has helped plastic manufacturing by cutting the cost of ethane, which will be processed at plants in Eastern Ohio.

The 2013 MAGNET report says manufacturing jobs climbed by 8 percent, led by exports and drilling supplies. 
Here's the link to the report: 


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