GRAND FORKS – Manufacturing is making a comeback.
As the global recession hit in late 2007, manufacturers across the country and locally shed jobs. Both North Dakota and Minnesota have added thousands of jobs since the summer of 2009, when the economic recovery officially began, but still remain below pre-recession employment levels.
That could change next year. A Nebraska-based economist recently predicted North Dakota and Minnesota would recover the manufacturing jobs lost during the recession sometime in 2015.
Steffes Corp., a Dickinson-based steel product maker, is one example of a manufacturer that has recovered. Its employment dipped to about 115 as sales slowed by 30 percent. But Steffes executives saw an opportunity in the rapidly expanding energy industry in western North Dakota.
“We’ve been riding that wave ever since,” said company president Joe Rothschiller. Steffes now employs about 300, plus added a plant in Grand Forks in 2012, where it employs another 110.
Ernie Goss, a regional economist at Creighton University, reported North Dakota lost about 2,400, or 13 percent, of its manufacturing jobs between December 2007 and June 2009, but has recovered almost 1,800 jobs since then.
Minnesota, meanwhile, has gained back about 20,000, or 64 percent, of its lost manufacturing jobs.
Both states’ recoveries are well ahead of some other states. Missouri and Kansas have recovered only about 7 percent and 17 percent of lost manufacturing jobs, respectively, according to Goss.
He predicted that, based on surveys of businesses in the states, North Dakota’s manufacturing employment would return to pre-recession levels in the first six months of 2015. Minnesota would do the same in the latter half of 2015.
Slightly different figures from the Minnesota Department of Employment and Economic Development show the state would need to almost double its recent growth rate to meet that milestone. North Dakota is about 500 jobs away from meeting its pre-recession level, according to state figures.
Regardless, most manufacturers are in better shape now than late 2009. A MDEED survey from that time showed 73 percent of manufacturers reported fewer orders, while 59 percent reported fewer employees. By 2013, 70 percent reported having more or the same number of orders, while only 22 percent reported having fewer employees.
Goss wrote in an email that, until recently, the expansion in global demand, rapid growth in U.S. agriculture, and energy and alternative energy production has driven manufacturing growth.
Randy Schwartz, CEO of the Dakota Manufacturing Extension Partnership, said the manufacturing sector is somewhat directly tied to the health of the overall economy.
“They tend to feel it very quickly when something goes down,” Schwartz said. “The overall improvement in the economy has helped manufacturers rebound a lot.”
The recession didn’t hit all manufacturers evenly.
Paul Lucy, the director of the economic development and finance division at the North Dakota Department of Commerce, said strong commodity prices helped agricultural equipment manufacturers, while the construction industry was hit hard.
Numbers prepared by Chet Bodin, a regional analyst for MDEED, show a similar uneven effect in the northwest region of the state. Paper manufacturing lost 44.7 percent of its jobs between 2006 and 2013, while food manufacturing actually increased employment by 17.3 percent.
Meanwhile, average weekly wages across all manufacturing sectors in the region grew by 25.8 percent in those seven years, one possible signal of the strong demand for workers.
There are other current positive signs in the northern parts of Minnesota and North Dakota.
Polaris, which makes snowmobiles and other off-road vehicles at a Roseau, Minn., plant, laid off about 100 workers in early 2009. But its employment has jumped since then, from 1,443 to 1,666 this month, according to Polaris spokeswoman Marlys Knutson. The company’s sales have increased in that time, from $1.6 billion in 2009 to $3.8 billion in 2013, she said.
Dave Young, owner of Young Manufacturing in Grand Forks, said the laser cutting service and metal fabrication machine shop had some employees who were willing to take time away from their jobs during the recession. He said orders “just dropped off.”
“We were fortunate that we had quite a diversified customer base,” he said. “Everybody was still ordering a little, but it just wasn’t what it had been.”
Young said they’ve since recovered. “We’ve got a full crew and a very heavy workload,” he said. “We’re hopeful that will keep going that direction.”