The state’s manufacturing sector is among the strongest economically, a recent report says, even with the turmoil wrought by the coronavirus outbreak.
“During the COVID-19 pandemic, manufacturing has been a significant contributor to the lifeblood of Utah’s economy,” said Stephen Reed, director of Utah State University’s Utah Manufacturing Extension Service. “While we have seen a decline in some of Utah’s manufacture segments, others, like those associated with the outdoor recreation industry have experienced significant increases in production demand.”
The Utah Industry Resource Alliance released the latest information from an in-depth economic study on the impacts of the pandemic-induced recession on the state’s manufacturing industry. The alliance, a nonprofit organization supporting economic development for Utah manufacturers and rural businesses, announced last week its 2020 Economic Impact Report detailing the impact of the industry on the state’s overall economy.
The global pandemic affected all businesses throughout the state, either through significant growth or, contrarily, through steep revenue declines, according to a news release. In response, state and federal agencies provided much-needed funding to those impacted or through agencies charged with delivering targeted aid to local businesses.
“Utah’s manufacturers are positioned to have more favorable economic outcomes than originally forecast in November 2020,” said Tulinda Larsen, executive director of the Utah Advanced Materials and Manufacturing Initiative. “Utah’s economic performance, combined with mostly positive economic activity and improvements in logistics over the same period nationwide, places Utah’s manufacturers in good position for further recovery and growth over the forecast period to 2025.”
A state economic analyst echoed those sentiments, stating the Beehive State’s manufacturing industry has indeed fared well during the upheaval caused by the pandemic.
“Right out of the gate, there were probably some slowdowns, but while (the industry) had some job losses, it wasn’t real deep. In fact, by December that industry was back to job growth,” explained Mark Knold, chief economist for the Utah Department of Workforce Services. “Their setbacks might have been about 2% during some of the deeper parts of COVID, but that’s pretty much nothing compared to some other industries.”
He noted that quantity-wise, most manufacturing takes place in Salt Lake County, but areas like Cache County have manufacturing comprising as much as 30% of the local employment base. Fortunately, the industry and its various subsectors have been able to maintain their economic vitality even during the worst of the COVID-19 downturn.
“Utah has really just been bucking the national trend for a long time. You got that slow, that long steady decline largely across the nation, but not here,” he said. “It can grow around 2% per year. Obviously, we didn’t do that last year (because) COVID knocked everybody off track a bit. By December, (the industry) had come back to job growth on a year-over basis. It’s in pretty good shape.”
Among the organizations tasked with providing guidance to the state’s manufacturing industry is the University of Utah Manufacturing Extension Partnership Center — the statewide help center funded by the U.S. Commerce Department’s National Institute of Standards and Technology Manufacturing Extension Partnership. The local center acts as a consulting company to advise manufacturers across the state how to improve their productivity, explained U. center director Steve Black.
“In our local economy, the predominance — 80% — of the manufacturers have less than 20 employees so our goal is specifically to work with small and medium-sized manufacturers, anyone 500 or below,” he said. “Utah is a prime spot for the (Manufacturing Extension Partnership) and for an opportunity to make a difference.”
He said since 2016, the program has helped that state grow its manufacturing base and attracted companies from other states to consider relocating to the Beehive State.
“We’re actually seeing an influx of manufacturing into Utah. Originally when the MEP grant came to the university, it was estimated we had about 3,200 manufacturers, Black said. “As our outreach has continued, that number has gone up significantly (to approximately 4,300) and a lot of the companies have moved from California or from other states to Utah because of the favorable conditions that we have here — both politically and economically, and the educated workforce.”
For Kirk Gates — director of Continuous Improvement at Complex Fabricators, a Utah-based machining and fabrication company — the pandemic had a major impact on the business as orders for services dropped off significantly as the outbreak took hold in Utah and nationwide.
“We don’t have as much revenue as we used to,” he said. “We had to really scramble over this last year to try to replace as much of that as we could, which has been a challenge for sure.”
He said over time, however, the company has been able to restore most of its business production as the economy began to rebound.
“The economy has bounced back rather quickly. We’re looking to hire a few skilled folks, even not so skilled, and we’re already having trouble finding them,” he said. “We need welders, we don’t have welders, and we’ve been trying to find that skill set and we — I’m sure, along with others — are having that same issue.”
He said once the pandemic restrictions subside, the company hopes to hire more people as production ramps up.
“We are optimistic, for sure,” Gates said. “We’re seeing an uptick in requests for quotes and we’re trying to compete for (contracts).”