Despite Losses, Idaho Manufacturing Sees Improvements

In recent years, the manufacturing industry in the United States has been a skeleton of what it once was. As some manufacturers outsourced work to foreign countries in pursuit of cost savings, others simply struggled to stay alive, unable to keep up with increasing competition in an ever-expanding global economy.

From 2000 to 2010, manufacturing posted net job losses each year. Manufacturing jobs decreased 30 percent, losing more than 5 million jobs over the decade. Regardless of the cause, once proud cities like Detroit are left desolate by the relative death of the industry.

US man jobs in thousands

People previously employed by the industry do not have much hope their jobs will return. Despite modest growth from 2011 to 2013, the U.S. Bureau of Labor Statistics recently projected the industry will lose an additional 5 percent of its jobs nationwide by 2022.

Idaho

While manufacturing accounts for approximately 11 percent of total employment in Idaho, the industry has seen a decline similar to that of the U.S. From 2000 to 2010, the industry fell 25 percent, dropping more than 18,000 jobs. It posted net job losses seven of the 10 years over the decade – the greatest coming in 2009 when the economy lost more than 8,000 manufacturing jobs. Beginning in 2011, however, jobs in manufacturing began to stabilize.

Idaho man jobs

Manufacturing Concentration

Despite the job losses Idaho sustained during the recession, data indicate manufacturing has potential for significant growth, deviating from the national trend.

Location quotients, which measure a state’s industrial specialization relative to the nation,  highlight differences in employment concentrations to show strengths and weaknesses. Location quotients greater than one typically indicate an industry of strength, specialization and exporting ability.

The location quotients for manufacturing jobs in Idaho are positive, indicating the industry’s table of LQability to expand. Despite the job loss in manufacturing, its location quotient is greater than one and has increased.

In 2000 the location quotient was 1.22 with employment topping 71,000 in the state. By 2013 the location quotient increased to 1.37 even though employment had dropped to 59,000. The increase in the location quotient despite the job loss would identify manufacturing as an industry of experience and specialization in Idaho.

Recent Growth

Manufacturing has begun to stabilize in Idaho. From 2010 to 2013, manufacturing added over 6,000 jobs , nearly a third of the jobs lost during the previous decade.

Since 2010, four of six regions in the state experienced double-digit percentage growth in manufacturing. The only region with losses was southeastern Idaho, where multiple food processing plants such as Heinz and Simplot closed. Amy’s Kitchen, however, recently announced it would take over the Heinz plant, adding a significant number of jobs and further bolstering growth statewide.

percent change in man jobs

Percent change by region

Over the past three years, manufacturing had the second largest percentage increase in available jobs of any industry in Idaho. Jobs in manufacturing grew by 11.4 percent, second only to mining at 11.5 percent. These were the only two industries to have double-digit percentage increases during that time. Manufacturing, however, grew by more than 6,000 jobs, while mining only grew by 260 jobs.

Industry growth in idaho

Projected Growth

While manufacturing jobs are expected to decrease 5 percent in the U.S. by 2022, Idaho appears to be heading down a different path. The Idaho Department of Labor projects Idaho’s economy will add 109,000 jobs from 2012 to 2022. Of those, over 6,000 will be in manufacturing, an 11 percent increase in the industry and the fifth largest in the state.

Growth in manufacturing will not only bring good jobs to the economy but jobs with high wages. According to the Quarterly Census of Employment and Wages survey, manufacturing wages are much higher than the state average. In 2013, the average Idaho manufacturing wage was $53,248 while the average wage for all industries was $36,713.

Concern

One possible area of concern is Idaho’s future workforce. While the economy is projected to add an additional 109,000 jobs, the workforce is projected to be short 95,000 workers. For Idaho to achieve the projected growth, the state’s human capital will have to grow. As more people enter retirement and more firms move their business into the state, increasing demand will be placed on skilled occupations such as machinists and welders. Trade schools will play a critical role training the workforce to meet industry’s future needs. Those who possess the needed skills will become increasingly valuable, but if Idaho’s workforce is unable to fill the projected jobs, industry may be forced to look elsewhere.

Christopher.StJeor@labor.idaho.gov, regional economist
(208) 557-2500 ext. 3077

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