October 1 is Manufacturing Day!

It’s a day that should bring pause to every community in the state, because almost every community has some kind of manufacturing and manufacturing is a pillar of every economy.

According to three reports recently released by the Montana Manufacturing Extension Center at Montana State University, the state’s manufacturing sector is strong and MMEC is helping manufacturers succeed.

The 2019 State of Montana Manufacturing report, along with survey results of Montana manufacturers, were prepared by the Bureau of Business and Economic Research at the University of Montana.

“Manufacturing is doing quite well in Montana right now,” said Paddy Fleming, MMEC’s executive director.

The report analyzes a variety of data from the U.S. Bureau of Labor Statistics and other sources to give a comprehensive overview of trends in the state’s manufacturing sector. Highlights from the 2019 report include:

• Manufacturing accounted for 16.9% of total statewide earnings in 2018, on par with tourism and ahead of mining and farming. The largest share of that, 17.1%, was from the petroleum and coal sector, followed by wood products at 13.2%.
• There were a total of 1,643 Montana manufacturing establishments last year. Metal fabricators were the largest category at 256. Miscellaneous ranked second with 184, followed by food with 174.
• Manufacturing supports 25,100 jobs in Montana, or 3.7% of the state’s total. That’s up from 3.2% in 2010. The wood products sector accounted for the most jobs, 3,193 in 2017, a decline of 35.6% since 2007.
• Roughly 2/3 of Montana manufacturers were small businesses with fewer than five employees.
• The fastest growing sector over the past decade has been beverages and tobacco, which includes breweries. The number of establishments in that sector has more than doubled, to 132, and breweries alone employed 979 people in 2018.
• Sectors losing firms include wood, petroleum and oil, paper and primary metal.
• Montana’s largest export market for manufactured goods is Canada, with $516 million in 2018 exports, followed by China at $90 million.

A second report summarizes the results of the 2019 Montana Manufacturers Survey, which BBER has conducted annually since 1999 to gauge manufacturers’ perspective on their economic performance and their outlook for the following year. Highlights include:

• 51% of respondents said their gross sales increased over the past year; 30 percent said they were unchanged.
• 54% said production increased at their business; 26% reported no change.
• Half of respondents said their profits increased; 27% reported no change.
• 32% said their number of employees increased; 56% reported no change.
• 61% said they expected their production to increase during the next year; 33% expected no change.
• 65% said that they expected their gross sales to increase during the next year; 28 percent expected no change.

The survey also invites Montana manufacturers to rank the issues most affecting their operations. The top-ranking issue, listed by 67% of respondents, was availability of qualified workers, followed by health insurance costs, at 60%.

“The lack of workforce is really concerning,” Fleming said. “We know companies are turning down business because they can’t find people to get the work done.”

That’s one area where Fleming said he hopes more businesses will take advantage of MMEC’s services. “We have a whole program to help companies attract, retain and develop workers,” he said, noting that MMEC business advisers can work with companies to develop worker training modules, craft promotional materials and identify a variety of other workforce solutions.

The third report provides an overview of how manufacturers and the state benefitted from MMEC’s services in 2018. The findings summarize 59 MMEC clients’ responses to a standardized questionnaire. Highlights include:

• In 2018, MMEC’s work with manufacturers resulted in 421 new and retained jobs, $71.8 million in new and retained sales, $106 million in additional business investment, $8.9 million in avoided cost savings and $2.4 million in additional Montana income tax revenue.
• Roughly 57 percent of the respondents said they relied exclusively on MMEC as a business service provider.
• Clients’ return on investment for MMEC service fees was 9.8 to 1.
• The state’s return on investment for tax dollars supporting MMEC was 7.9 to 1.