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Utah's manufacturing sector among nation's strongest

Utah's manufacturing sector among nation's strongest


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SALT LAKE CITY — A recent agreement involving the nation's soon-to-be president and vice president has highlighted a sector of the national economy that has suffered for years: manufacturing.

In Utah, however, the manufacturing industry is one of the key growth sectors in the state's long-range economic plan.

This week, President-elect Donald Trump and Vice President-elect Mike Pence announced an agreement with furnace and air conditioner maker Carrier and its parent company, United Technologies, to keep about 1,000 jobs at Carrier's Indianapolis-area facilities from moving to Mexico.

The company had planned to move more than 2,000 positions south of the border, but those plans changed following a dialogue between Trump and Carrier management.

To keep the jobs in Indiana, the state agreed to offer economic incentives.

Supporters hail the agreement as a victory for working families who have lost scores of manufacturing jobs over the years as companies cut expenses by moving to countries with cheaper labor costs. But critics call the deal a short-term triumph for a few workers who will benefit at the expense of the free market.

While the industry has experienced challenges in the Rust Belt, locally the story of manufacturing is much more upbeat.

According to the Economic Development Corporation of Utah, the state’s manufacturing and distribution industry has experienced employment growth above 11 percent over the past five years.

Within the industry, medical equipment and supplies manufacturing increased by 27 percent, with motor vehicle and parts manufacturing increasing by 30 percent over the five-year period.

Employment within the industry is among the higher-paying sectors in the Utah economy, state officials said. The average monthly manufacturing salary in Utah in 2015 was $4,533, while the statewide average monthly wages across all industries was $3,621, according to the Utah Department of Workforce Services.

The industry is doing so well, in fact, that companies are having a difficult time filling positions with qualified workers, said Todd Bingham, president of the Utah Manufacturers Association — the state's largest trade organization representing the industry throughout Utah.

Utah currently has approximately 3,500 manufacturing businesses statewide that employ about 100,000 people, Bingham said.

"Really, the only thing that's holding our companies back is the inability to find skilled workers," he said. "That is different than some areas of the country."

Bingham said local companies want to expand their operations but have difficulty attracting younger workers who typically don’t consider manufacturing as a long-term career path.

“One, they don’t know anything about it, so they are saying, ‘Why would I go work in manufacturing when I don’t know anything about it?’” he explained.

With so much of Utah’s manufacturing involved in composites, aerospace, medical devices and other high-tech fields, the industry needs smart individuals who can communicate well, think critically and solve problems, he said.

Bingham also noted that many sectors are looking for candidates with two-year certificates and skill sets that allow them to begin working at a high level right away.

“Today’s generation is going to have to adapt a little bit with what is the skill set (required) depending upon their interests,” he said. “This is not your grandfather’s manufacturing industry. It’s evolving, automated, high-tech and clean. It’s not dark, dirty and dead end.”

In Utah, manufacturing is among the key components of the state’s overall economic pie, explained Val Hale, executive director of the Governor's Office of Economic Development.

“We have such a diverse economy, and underpinning all of that is manufacturing,” Hale said. “It really is such a critical part of our economy.”

Among the issues faced by manufacturers in the Beehive State and across the country is global trade. As noted in the Carrier example, many companies are choosing to shift manufacturing operations abroad to save money.

Some critics blame international trade agreements for the exodus, including deals such as the Trans-Pacific Partnership.

The partnership is a trade agreement among 12 Pacific Rim nations, excluding China. The final proposal was signed in February in Auckland, New Zealand, and is awaiting ratification.

The aim of the 30-chapter agreement is to "promote economic growth; support the creation and retention of jobs; enhance innovation, productivity and competitiveness; raise living standards; reduce poverty in the signatories' countries; and promote transparency, good governance, and enhanced labor and environmental protections."

Critics argue the agreement would adversely affect working families in the U.S. to the benefit of large corporations, while supporters claim the deal would help stabilize commerce between the United States and its Pacific trade partners.

Hale said such agreements are of great benefit to states such as Utah that have a trade surplus — meaning more product exports than imports. So local businesses would be concerned to see those deals eliminated, he said.

“If (the nation) does something that is going impact (Utah’s) ability to export, it could have a fairly dramatic effect on our economy,” Hale said. “Utah, more than other states, could be negatively impacted by some the trade restrictions that are being talked about (nationally).”

Jasen Lee


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