March 25, 2012

Assessing energy costs' effect on the economy

Gov. Paul LePage's says high energy costs have inhibited Maine job creation, but experts and businesses say a skilled work force and location are bigger issues.

By Tux Turkel tturkel@pressherald.com
Staff Writer

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"At the end of the day, it's all about the workers," said David Tassoni, Athenahealth's senior vice president for operations.

The company analyzes and processes billing and medical claims. That requires problem-solving and communication skills, he said.

Skills trump energy costs for the jobs driving Maine's economy, labor department data show. They also show how energy-intensive jobs have been fading, but not directly because of costs.

Global market forces have been eroding Maine's manufacturing industries for many years, trends made worse recently by the recession. Wood products jobs fell from 7,865 in 2000, to 4,104 in 2010. Paper manufacturing plunged from 12,847 in 2000, to 7,397 in 2010.

"Production is declining, and that's true throughout the nation," said Glenn Mills, chief economist at the state's Center for Workforce Research.

Mills declined to discuss policy issues around the role of energy and work-force skills and training in job creation, or to comment on the governor's statement. But he did point to data that highlight where jobs are being created in Maine, and they're not in industries where energy is a deciding factor.

Professional and business services jobs grew from 52,583 in 2000, to 56,715 in 2010. Jobs in leisure and hospitality are up from 57,845 to 61,547. Hospital employment rose from 26,217 to 34,551 during the period.

The labor department also made projections for net job growth between 2008 and 2018. These are the top five positions: Registered nurse, personal and home care aide, home health aide, food preparation and server, customer service representative.

The department also looked at the fastest projected rate of growth. The top five jobs are: Network systems and data communications analyst, medical scientist, financial examiner, medical equipment repairer and funeral attendant.

'ONE OF MANY FACTORS'

Many fast-growing jobs are office-based, and energy costs do matter to companies that lease space. It's a growing issue at buildings heated with oil. Fuel oil has been at record levels -- averaging $3.86 a gallon, according to the state's most recent weekly survey. That's 24 cents below the national average, but higher than natural gas.

As he travels the state, LePage hears from many business owners upset by high energy costs, according to Adrienne Bennett, his spokeswoman. That feedback has informed his views on how energy influences job creation, she said.

"This is the information coming from the job creators in the state," she said.

For business owners, questions about utilities now rival those regarding rent, taxes and common-area charges, according to Mark Malone of Malone Commercial Brokers in Portland. Typically, however, energy isn't the deciding factor for office relocation.

"It's one of many factors," he said, "but it's probably not the one that's going to make or break it."

WORKERS ARE KEY

Even for small Maine manufacturers, the picture is more complicated.

ComNav Engineering makes microwave and other filters for business and the military. It uses a lot of electricity, and Martin Geesaman, the president and founder, said he has contemplated relocating out of state. But that would mean losing the technicians and other workers trained over time.

"I really value my employees," he said. "I use a lot of power, but it's not worth moving to a different location."

The 16-year old Portland company is moving, but just down the street. It just bought the former Maine Turnpike Authority headquarters, to have more space and better parking.

Tony Gelardi has been making injection molded products in Maine since 1973, when he co-founded Shape Inc., an audio cassette maker. Today, his Sagoma Technologies has a dozen workers who make packaging for optical discs and other items in Biddeford. The plant uses electricity to melt and reform plastic. Running the machinery all day and night translates into $10,000-a-month electric bills.

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