AUGUSTA – Maine lost the second highest percentage of manufacturing jobs in the nation over the last three years – a total of 17,300 jobs – according to an industry report. Despite growth in other job categories, state officials are concerned.

“It’s not just Maine that has been hurt,” said Jack Cashman, the state’s economic development commissioner. “This is a national problem. We have been losing manufacturing jobs for a number of reasons for over a decade.”

The study, gleaned from U.S. Department of Labor statistics and released this month by the National Association of Manufacturers, backs up Cashman’s assertion.

Nationally, 2.6 million manufacturing jobs were lost, representing a 15.2 percent decline, over the three-year period that ended in July.

During that time, Maine lost 21.7 percent of the 79,900 manufacturing jobs. “I think in Maine we were somewhat buffered over the years, and it has just come home for us in the last three years,” Cashman said.

In releasing the study, Jerry Jasinowski, president of the National Association of Manufacturers, said a number of changes are needed in national policies to help manufacturers keep existing jobs and create new ones.

“Policy-makers need to address the significant cost increases in the areas of health care, litigation, regulation and energy that are undermining the ability of manufacturing to compete and prosper,” he said.

The group wants changes in trade policies. The association also complained about how other nations are embracing technologies developed in the United States to take jobs away from Americans.

Galen Rose, an economist with the Maine State Planning Office, said the loss of manufacturing jobs hurts more than the loss of jobs in other categories because they are better paying and usually are accompanied with a good benefits package. He said manufacturing also has a broader impact on the economy than many other sectors because of the “spin-off” effect of the subcontractors hired and materials purchased in the manufacturing process.

Rose said while Maine has been losing manufacturing jobs, other sectors of the state’s economy, such as the retail, health care and service sectors, have been creating new jobs.

Statistics obtained from the state Department of Labor indicate that other job categories generated 15,700 jobs over the three-year period, almost offsetting the manufacturing losses.

“But, for the most part, those are jobs that pay less and have fewer, if any, benefits,” he said.

Overall, over the three years, the number of jobs in manufacturing durable goods such as appliances and computers declined in Maine by 6,900 or 16.9 percent. The number of jobs producing nondurable goods, or consumable items such as paper, declined 10,400, or 26.7 percent over the same period of time.

The paper products sector lost 3,300 jobs in the three years – a 25.4 percent loss; leather products were down 3,200 jobs to just 1,800 in the state, a decline of 64 percent.

Computer and electronic products jobs declined from 6,900 jobs to 4,000 jobs – a decline of 42 percent.

“There are several trends at work here,” said James Breece, a University of Maine economics professor and executive director of the Office of Policy Planning and Analysis for the University of Maine System. “These are national trends and they all apply to Maine to some degree.”

He said some jobs counted as manufacturing jobs have been outsourced, so they show up as a loss in manufacturing jobs but they do represent an increase in another job category, such as the services sector.

Another major factor is the slow economy that has led to layoffs by many manufacturers because product orders are down.

In a number of manufacturing sectors, there is a drive for increased productivity through improved technology, Breece said.

“I think that is what you are seeing in the computer and electronic products sector,” he said. “They are moving to more computerized manufacturing processes that produce the same amount of product, or more products, with fewer workers that are more skilled.”

State officials are not waiting for the U.S. Congress to address the broader policy issues that might encourage growth in manufacturing.

Cashman is chairing an advisory group that Gov. John Baldacci created this summer to make policy recommendations on how to encourage the creation of “good” jobs.

“Research and development and high-tech industries, that’s the wave of the future,” Cashman said.

He said the state needs to invest more in education at all levels, and target job creation incentives to those manufacturing areas that can “make a difference” in transforming Maine’s economy.

“There is no question it is changing,” he said. “We want it to develop in areas where we have the advantage, like marine technologies and aquaculture and forestry.”

Cashman said the advisory group includes Labor Commissioner Laura Fortman, Education Commissioner Susan Gendron, University of Maine Chancellor Joseph Westphal and Maine Community College System President John Fitzsimmons.

He said the group is looking at the complex issues of developing the skilled work force needed by the new economy.

Cashman acknowledges it is doubtful the state can gain back all those jobs as quickly as they were lost. But, he said if it does not happen, it will not be for lack of trying.

“I don’t allow anybody to come in here and use the word ‘can’t,'” he said. “We think positive.”