MSU Helping Manufacturing to Be a Growing Part of Montana’s Economy

BOZEMAN — Manufacturing continues to be a significant driver of Montana's economy, according to a report recently released by Montana State University's Montana Manufacturing Extension Center, whose positive impact is discussed in the annual snapshot.

The 2020 Montana Manufacturing Report, prepared by the Bureau of Business and Economic Research at the University of Montana, analyzes trends in the state's manufacturing sector for 2019, summarizes manufacturers' survey responses about how their businesses are doing and describes how MMEC's outreach to manufacturers around the state is paying off.

MMEC, which is housed in MSU's Norm Asbjornson College of Engineering, works one-on-one with manufacturers to help them assess and improve their production processes, develop their workforce, and leverage research and technological developments to keep manufacturing competitive in the state.

"This report highlights how important manufacturing is to Montana’s economy and validates why Montana has been ranked as one of the top 10 states in terms of manufacturing growth," said Paddy Fleming, MMEC's director.

With an analysis of data from the U.S. Bureau of Labor Statistics and other sources, the report gives a comprehensive overview of the state's manufacturing sector in 2019, the most newest annual data available. Highlights from the report include:

• There are more than 3,300 manufacturing businesses in Montana.
• Montana manufacturing accounted for $1.1 billion, or 5%, of total private income.
• The largest number of manufacturing businesses were metal fabricators (284), followed by makers of miscellaneous durable goods (190), food (167) and beverages and tobacco (149).
• Most Montana manufacturers are small businesses. More than half have fewer than five employees; roughly 85% have fewer than 20 employees.
• The largest sectors in terms of 2019 company earnings were petroleum ($47.8 million) and wood products ($33.2 million).
• Manufacturing employs about 21,000 workers, or roughly 4.5% of Montana's workforce. The average annual pay is $51,000, or 17% above the state average.
• Montana manufacturing is growing at more than double the national average in terms of employment, income and output.

The report also summarizes the results of the 2019 Montana Manufacturers Survey, which BBER has conducted annually since 1999 to gauge manufacturers' perspectives on their economic performance and their outlook for the following year. The survey was conducted before COVID-19 and therefore doesn't reflect how the pandemic has affected manufacturers. Nearly 300 manufacturers responded to the survey.

• 50% of respondents said they increased their production capacity, and 43% had higher profits in 2019.
• 56% maintained their level of employment, although 27% said they were experiencing a worker shortage.
• 90% said they hadn't experienced declines in their shipment of goods to other countries due to retaliatory tariffs placed on exports, although 51% said they experienced an increase in the price of their imported inputs because of tariffs.

The report provides an overview of how manufacturers and the state benefitted from MMEC during 2019. The findings summarize 63 MMEC clients' responses to a standardized questionnaire. Highlights include:

• 73% of respondents said they relied exclusively on MMEC to recommend improvements to their operations.
• 70% listed staff expertise as their top reason for choosing MMEC.
• 71% percent said the challenge of reducing their operating costs is their top reason for enlisting MMEC's services.
• 82% gave the highest ranking when asked how likely they would be to recommend MMEC to another client.
• Manufacturers' average return on investment for fees paid to MMEC for their services was 12.9 to 1.

The survey also tracks the cumulative impact of MMEC services. According to the report, since 2000, MMEC's activities have generated:

• $328 million in new investments.
• $1.3 billion in new and retained sales.
• 6,186 new and retained jobs.
• $160 million in cost savings.

According to the report, the state funding that MMEC received in 2019 generated roughly 4.9 times that amount of return in terms of state tax revenue, due to jobs created by MMEC's activities.

The report can be found on MMEC's website at: http://www.montana.edu/mmec/news/reports.html.

- By Marshall Swearingen, MSU News Service -