Business

State remains strong in medical-gear field

Exports, companies, funding grew while workforce dipped

The Massachusetts medical-device industry maintained its position as the second-biggest cluster in the country, even as it lost 5 percent of its workforce, according to a new report.

The state continued to add companies, attract venture capital funding, and increase exports, said the analysis from the trade group Massachusetts Medical Device Industry Council.

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“We are right behind California,” said Rajesh K. Misra, managing director of KPMG LLP in Boston, the accounting firm that conducted the analysis. “We are number two, and we’re holding that spot.”

Medical-device leaders will discuss the findings of the study at their annual conference Wednesday in Boston. The industry includes companies that develop stents, catheters, imaging machines, dental fillings, hip implants, pregnancy tests, and many other devices.

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One of the bright spots for the industry is a solid increase in foreign sales. Medical-device exports from Massachusetts represented 19 percent of the state’s exports in 2014, up from 14 percent of exports in 2011, according to the study. Also, the number of medical-device companies grew 20 percent in that period, to 480 companies.

Medical devices account for less 1 percent of the 3.4 million jobs in Massachusetts. The study shows Massachusetts shed about 1,100 medical device jobs from 2008 to 2012, falling slightly behind the workforce in Minnesota as well as its perennial rival and national leader, California.

The state had about 22,000 jobs in the industry in 2012, or 6 percent of the medical device jobs in the country, according to Census data used in the report.

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Tom Sommer, president of the industry group, also known as MassMEDIC, blamed the job losses on a medical-device tax implemented as part of the federal health care overhaul and new health care payment models that encourage providers and insurers to cut costly treatments and procedures. The industry is lobbying Congress to repeal the tax.

The controversial tax didn’t take effect until 2013, but Sommer said it had a chilling effect on industry jobs even before then, and it continues to pose a challenge. Nationally, the industry lost about 3 percent of its jobs from 2008 to 2012, the report said.

“Over the years, we have learned that companies are reducing headcount or putting expansion plans on the shelf for a while,” Sommer said. “They are reducing research and development. They are seeking lower costs.”

Mergers, acquisitions, and outsourcing also are likely to have contributed to the loss of jobs, Sommer added.

But state data show manufacturing jobs for medical devices are holding steady at around 11,000.

“These are high-wage jobs, and they’re the core of the economy,” said Barry Bluestone, a Northeastern University professor who has studied employment in life sciences. “We see real strength in medical devices.”

Priyanka Dayal McCluskey can be reached at priyanka.mccluskey@globe.com. Follow her on Twitter @priyanka_dayal.
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