WOODSTOCK – Despite lower unemployment rates, McHenry County's job outlook remains muted.
Unemployment stood at 7.5 percent in November, down from 8.7 percent from the prior year. In September, the rate had fallen to 7 percent, the lowest since December 2008, when it was 7 percent.
But those figures mask some of the challenges area businesses and workers could face in the coming years, according to a report by the McHenry County Workforce Network Board.
Businesses throughout McHenry County are expected to hire more workers, but they may not have enough skilled laborers as older workers retire and younger workers are retrained.
McHenry County's manufacturing sector, which accounts for 16.7 percent of all jobs in the county, will likely continue to shrink.
Though other industries, such as health care, could see double-digit growth, many of those new jobs will pay less, according to the 2012 McHenry County Labor Report, released in the fall.
There were 16,767 manufacturing jobs in the county in 2012 with average earnings per worker of $68,080. This key sector, which accounts for nearly a quarter of the county's gross regional product, is projected to shrink 7 percent by 2015, shedding some 1,112 jobs.
"What we're seeing is more evolved manufacturing," said Pam Cumpata, president of the McHenry County Economic Development Corp. "As manufacturing becomes more efficient, we may see a decline in the number of positions."
Conversely, health care and social assistance jobs will increase 10 percent by 2015, bringing 1,091 new jobs. But the average 2012 earnings per worker in this segment was $51,840, about $16,000 less than in manufacturing, according to the report.
Adjusted for inflation, the county's per capita income dropped 8.6 percent between 2000 and 2010, the labor report found.
The report predicted job growth in McHenry County would increase by 2.8 percent, going from 122,746 jobs in 2012 to 126,198 in 2015. That's slower than the projected statewide job growth of 3.1 percent for the same time period and well below the national increase of 4.3 percent.
Even so, the job growth is welcome, said Jeffery Poynter, director of the McHenry County Workforce Network Board.
"If we can stay above 2 percent, that will be good," he said.
Though unemployment persists, the numbers have leveled off more recently, said Julie Courtney, director of the McHenry County Workforce Network.
"Is it rosy for everybody? Absolutely not. There's still a lot of people out there in need," she said. "But now there is a little glimmer of hope. Those people who are unemployed are getting back to work a little faster than in the last couple of years,"
One problem is that some of the unemployed aren't qualified for existing job opportunities. As older skilled workers prepare to retire, there's a dearth of younger workers with the same skills to fill those jobs.
The shortage is a major concern for local manufacturers.
"This is getting to the point where it's critical," Courtney said. "As one manufacturer has said, if we don't have the people to do this, these jobs and these businesses are going to go away. And if manufacturing is making up 16 percent of your [total employment], that's going to have a huge impact on what the future of McHenry County looks like."
Fifty-four percent of workers in the county's manufacturing sector are at least 45 years old.
"All that industrial knowledge will be leaving the workforce," Poynter said. "Who is going to replace them?"
There's a much smaller pool of prime age workers behind them, he said.
The McHenry County Workforce Network, local manufacturers, and McHenry County College are working together to train younger workers to meet the demand. However, skilled workers may retire faster than new workers can be trained to replace them, in part because of the amount of training required for high-skill manufacturing, Poynter said.
In addition to bolstering local training efforts, local officials are hoping McHenry County's schools and other amenities will attract younger workers and their families as the larger national economy improves, Poynter said.
While some local companies are preparing to expand, others are treading water amid concerns about economic recovery and the looming fiscal cliff.
Centegra Health System plans to build a third hospital in Huntley for $233 million by 2016. The hospital is expected to create 1,100 permanent jobs, Centegra officials have said.
Sage Products, which has been acquired by Chicago private equity firm Madison Dearborn Partners, is also gearing up for expansion.
"With Madison Dearborn Partners, Sage will be looking to grow and expand our workforce here in Cary as well as our sales force domestically and internationally," Sage Products President and Chief Operating Officer Scott Brown told the Northwest Herald in November.
Other businesses are focused on holding on to what they have rather than growing.
"We've been real careful about our routes," said Jill Dinsmore, president of JA Frate Inc., a transportation company based in Crystal Lake. "It's sad to say, but we're just trying to maintain."
However, the company was on better footing than it was a few years ago, with a stable customer base and enough money to replace aging trucks with new models to lower the average age of its fleet, Dinsmore said.
Signs of a broader economic recovery have brought some confidence to the labor market.
"Unemployment is going down," Poynter said. "And employers are starting to talk to us more and more."
* Business Journal Preview: This story appears in the McHenry County Business Journal's 2013 Book of Lists, published this week.