Manufacturers here say they've started seeing slow but steady growth and recovery in both the local and national market, and are hopeful about 2011, though cautiousness remains.
The national press has been reporting for some time that manufacturing has been strong despite the weak U.S. economy.
"Nationally, I think there are some signs that there is some recovery," says Mike MacKay, president of Spokane Valley-based MacKay Manufacturing Inc. "There is some improvement so far, but it's not huge."
As of September, the nation's manufacturing sector employed about 14.3 million people, up slightly from 2009's annual average of 14.2 million jobs, says the U.S. Bureau of Labor Statistics.
In Spokane County, manufacturing jobs have grown by about 400 positions since last year, and totaled 14,900 jobs at the end of September, compared with 14,500 jobs in the year-earlier month, says Doug Tweedy, a regional labor economist with the Washington state Employment Security Department's Spokane office.
"We have seen an increase in employment, which is a good sign," Tweedy says. "But it seems like there are some subsectors that are doing better than others."
One of the stronger subsectors is advanced manufacturing, which includes metal fabrication, chemicals, plastics, and composites, Tweedy says. Traditional manufacturing, consisting of areas such as printing, machinery, and furniture, is one of the sectors still lagging, but Tweedy says even those markets are slowly starting to recover, although not as fast as the advanced sector.
"Those advanced subsectors are gaining enough ground to produce a net increase in manufacturing," he says. "It's very slight, but it's an increase."
Stan Key, manufacturing industry manager for Greater Spokane Incorporated, says most of the manufacturers in the Spokane area are starting to see business pick up, but says the industry here hasn't fully recovered to where it was prior to 2009.
"We are starting to see a general upswing in orders, so it's coming back, but not as fast as we'd like to see," he says.
Key says one silver lining of the recession was that it spurred manufacturers here to become more efficient, including having to fill orders with fewer employees.
"That has certainly helped from a profitability and efficiency standpoint," he says. "And many also may have taken a look at markets they previously didn't reach."
Tweedy says manufacturing jobs currently make up about 7 percent of all jobs in Spokane County, up slightly from 6.7 percent in 2009.
He adds that overall, manufacturing is in a "churn," with some companies still forced to lay off workers, while others are increasing their payrolls.
MacKay Manufacturing, which makes components used in the medical, aerospace, and semiconductor industries, has been able to weather the poor economy well, having posted record sales so far this year, up 20 percent from last year, says MacKay.
The company, which serves manufacturers around the world, employs about 100 people and has hired about six additional workers this year, he says.
"Business has been extremely strong," he says. "A lot of our customers continue to grow."
He credits MacKay Manufacturing's success to growth within its current customer base, though he says it also has added new accounts in the past year.
Tate Technology Inc., which mostly makes electronic circuit boards, is another manufacturer here that has enjoyed considerable growth in sales this year, says president Lee Tate.
"We have grown significantly since spring," he says. "In order to keep up with demand, we have been working overtime every month since summer. It's a great story and not typical of our industry."
Tate says he noticed earlier this year that the U.S. manufacturing industry had stopped shrinking, but he hasn't seen any overall growth yet.
"I'm not sure what 2011 will be like, and if we will see continued growth or if we will have to shrink," he says of the industry, but adds that some of his customers are budgeting for 10 percent to 20 percent growth in 2011.
Tate Technology has hired 14 people this year, bringing its total employment to about 42 people, Tate says.
Like MacKay, Tate says his company also has increased its sales due to the organic growth of its customers. In addition, he says the company also has been able to pick up accounts as a result of the closures of some of its competitors.
"The recession has almost helped us," Tate says. "We are finding fewer competitors. A company that is on the verge of profitability in normal times doesn't make it in tough times, so a lot of them have gone out of business."
Tate says the company's sales are up 20 percent this year. When asked how he is able to succeed when similar companies are failing, he says, "It's very simple. We have no debt."
Not all manufacturing companies in the Spokane area, however, are seeing significant sales jumps.
Paul May, CEO of Spokane Valley-based Wagstaff Inc., a manufacturer of aluminum casting equipment, says the company's sales are down for the year, but less so than in 2009.
"We do think we've hit bottom and that it's turning around," he says. "We anticipate that 2011 will be better than 2010."
May says Wagstaff's fortunes largely follow the aluminum industry's health worldwide, and the average price of that metal has fallen in recent years.
"That price is now recovering," he says. "When that starts picking up, our customers will have better profits and can start spending more money."
May says Wagstaff's employment is down compared with 2009, though he's not sure by how much. He says it employs about 270 people.
May says he's noticed that many companies in the manufacturing sector are unsure if they should start hiring again.
GSI's Key also says that he hasn't seen a lot of hiring in the industry here lately, and that most companies are being very cautious.
"Most are very hesitant to do a lot of hiring right now until they are really sure that the recovery is really coming," he says. "They are adding people if they really need to, but they may be a little slower at hiring than previously."
May says he hopes to see Wagstaff's sales improve by 20 percent in 2011, but says the company has grown faster at other times in the past.
"I do think there are signs that manufacturing as a whole is improving, and that it will be a very slow and conservative growth," he says.
While the company waits for its sales to pick up, May says it's investing a considerable amount in improving and developing its products.
"We are continuing very strongly in research and development of our products even though times are tough," he says. "We feel that is very critical."
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