What’s not to love about Goldfish crackers?
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Manufacturer Pepperidge Farm just completed a $45 million expansion to its facility in Cache Valley, where it opened a new production line for those delectable crackers and added state-of-the-art technology to sustain its annual production of about 60 million pounds of cookies, snacks and frozen products.
The growing demand for Goldfish crackers is good for Pepperidge Farm and for Utah. Pepperidge Farm is one of about 3,740 manufacturing companies forming the backbone of the state’s economy. Although Utah isn’t generally thought of as a manufacturing state, Utah manufacturers generated 14.7 percent of the gross state product in 2012, says Todd Bingham, president of the Utah Manufacturers Association.
“Utah’s manufacturing industry comprises the largest payroll in the state,” he says.
Indeed, the manufacturing industry comprises nearly 10 percent of all state employment, according to EDCUtah research. It’s the third largest industry in Utah, with about 121,000 direct workers, based on 2011 figures. Further, the industry creates an additional 300,000 jobs through indirect employment in other industries such as material and service suppliers and accounts for 95 percent of the state’s exports.
Nationally, the manufacturing sector has grown steadily for the past five months, according to the latest survey from the Institute for Supply Management. Utah’s manufacturing industry, however, has been growing at a steady, three percent clip since about 2010, Bingham notes. The state’s total manufacturing output, which was $19.2 billion in 2012, has grown dramatically since 2008.
Utah Manufacturing Output
(billions of dollars, from 2003-2012)
Since 2003, Utah manufacturing output has grown from less than $10 billion to nearly $20 billion. Source: U.S. Bureau of Economic Analysis.
Not surprisingly, the largest concentration of manufacturers operate in Salt Lake, Utah, Weber, Davis, Cache and Box Elder counties, but manufacturers are spread across the entire state. In In Box Elder County, for example, 41 percent of employment is in manufacturing. Last May,Forbes called Utah a western manufacturing hotspot and ranked Salt Lake City 10th on its list of “The Big Cities Leading a U.S. Manufacturing Revival,” saying Salt Lake City “has enjoyed a rapid expansion of technology-driven manufacturing.” Forbes also ranked the Ogden-Clearfield metro eighth on its “mid-sized” list of manufacturing hotspots.
All of the pieces are in place for manufacturing growth to continue in Utah, according to a study released earlier this year by Ball State University’s Center for Business and Economic Research. Utah’s strength, it shows, lies in its strong labor force and its climate for manufacturing, which includes continued low health care costs due to the healthy lifestyles of residents and productivity gains in 2013.
“Perhaps that’s why nearly 50 percent of EDCUtah’s active economic development projects involve manufacturing concerns looking for the right environments to grow their businesses,” says EDCUtah President and CEO Jeff Edwards. “Our other strengths include a business-friendly environment, low utility rates and exceptional quality of life. Manufacturers are also recognizing that Utah has become a primary distribution hub to the western United States and is the central point of distribution in the Canada to Mexico corridor. Salt Lake City is also the first location where the three major rail lines leaving the Seattle, San Francisco and Los Angeles ports converge.”
While Utah’s manufacturing industry is certainly a bright spot on the state’s economy, Bingham says the state’s manufacturing industry needs more skilled workers to sustain its growth, especially at a time where the number of available skilled workers is declining. Machinists, welders, assemblers, automation technicians and engineers are in especially hot demand, but so are entry-level workers.
Enter the Utah Manufacturing Initiative. In response to the concern over the declining number of skilled workers, the Utah Manufacturing Association spent a year working with state government and industry leaders to develop an initiative that focuses on workforce development. Bingham says the first phase of the initiative was funded through the Utah Cluster Acceleration Partnership and was developed in collaboration with Salt Lake Community College, the Utah College of Applied Technology, the Governor’s Office of Economic Development, the Utah System of Higher Education and the Utah Department of Workforce Services.
Phase one established a steering committee of manufacturing executives that outlined the industry’s opportunities and challenges and established three priorities. The first priority centers on workforce development, training for existing workers and encouraging youth to seek employment in disciplines needed by the manufacturing industry. The second priority focuses on tax policy at the legislative level. Bingham says the industry is working with the legislature to formulate friendlier tax policies to help existing Utah manufacturers grow while also creating an environment favorable to manufacturers looking to locate here. The third priority recognizes that the manufacturing industry has an image problem. Bingham and other manufacturing executives are working to let Utah’s future workforce know that manufacturing can be a great career and the industry needs them.
“Manufacturing is the engine that drives American prosperity,” says Bingham. “It is central to our economic and national security. Utah can gain more stable and living wage jobs by focusing on this key industry than any other segment of the state’s economy.”
While still in its initial state, he believes the Utah Manufacturing Initiative will help Utahns understand that the state’s manufacturing industry enhances the quality of life. “For every dollar spent on manufactured goods there is an additional $1.37 worth of additional economic activity generated,” Bingham explains. “Manufacturing has a greater multiplier effect than any other economic sector. Manufacturing exists to provide the products we need for daily life in our modern world. Our initiative, along with any other efforts to expand this segment of the economy is essential to maintain our quality of life.”
