SPOTLIGHT ON UTAH MANUFACTURING

(Source: EDCUtah Economic Review – an interview with UMA President Tom Bingham)

By definition Utah is not considered a large manufacturing state, but the manufacturing sector is, nonetheless, the backbone of the state’s economy, generating 11 percent ($9.8 billion) of the gross domestic product and paying the second highest average annual wage, behind only mining.

Manufacturing jobs pay 127 percent of the average Utah wage and employ approximately 125,000 workers, or 10.6 percent of all state employment, according to Thomas E. Bingham, president of the Utah Manufacturers Association (UMA), one of the state’s oldest trade associations. On top of that, Bingham says manufacturing is one of the few sectors that bring new money into the state. “Out of the $6 billion in total goods exported, $5.3 billion were manufactured goods, or 87 percent of all exports,” he says.

Utah Manufacturing at a Glance

• Manufacturing Firms 3,974
  
• Average Employment 125,088
  
• Payroll $1,363,486,650
  
• Monthly Wage $3,633

Utah’s manufacturing sector is expected to continue its steady growth path, thanks to the state’s favorable business conditions and positive economic environment. “Hat’s off to our legislature over the past decades, for not putting undue restrictions on business and industry,” says Bingham, who also speaks fondly of Governor Jon Huntsman’s favorable business and economic policies.

What makes Utah such a great place for manufacturing? Bingham says there are four key factors:

1. Lower labor costs
2. Lower energy costs
3. Other favorable human resource costs, like cheaper worker’s compensation rates
4. A large, educated workforce with a strong work ethic

It’s true, Utah enjoys some of the lowest energy costs in the country, and also low labor costs, but the strong work ethic was a factor when La-Z-Boy, Malt-O-Meal, and West Liberty Foods all selected Box Elder County—“They liked the work ethic of the rural workforce,” says Bingham. Box Elder, Cache and Weber Counties are clearly hot beds for manufacturing in the northern end of the state. In Southern Utah, Iron and Washington Counties are experiencing an increase in manufacturing. “A lot of companies are relocating from California to Southern Utah, because they can still service their California markets and still enjoy Utah’s lower costs and better quality of life, Bingham says.

Of its manufacturing industries, Bingham says the state is heavy in aerospace and stronger than one might think in automotive manufacturing, with Autoliv Inc.’s operations in Box Elder and Weber Counties, and other automotive-related manufacturers scattered about. The state is also strong in medical device manufacturing, and the self-proclaimed headquarters for nutritional foods manufacturing, especially in Utah County. The largest concentration of manufacturers operate in Salt Lake, Utah, Weber, Davis, Cache and Box Elder counties.