Montana Manufacturing: 2015 Outlook Todd A. Morgan, CF
Montana & U.S. Manufacturing Employment 1990-2014 MT workers 28,000 US workers 21,000,000 24,000 18,000,000 20,000 15,000,000 Montana U.S. 16,000 12,000,000 12,000 1990 1995 2000 2005 2010 9,000,000 Source: BEA-REIS SA-25N
Montana Manufacturing Labor Income by Sector Other 18% Petroleum & Coal Products 16% Chemicals & Nonmetallic Minerals 13% Employment: ~23,500 Labor Income: ~$1.1 billion Machinery 7% Sales: ~$14 billion* Computers, Electronics & Appliances 4% Food & Beverage 14% Sources: BEA-REIS; Census Bureau; and BBER estimates Metals 11% Wood & Furniture 17%
Montana Manufacturing Inflation adjusted value of output increasing Highly influenced by price of petroleum products 15 Value of Montana Manufacturing Shipments Billions of 2013 Constant Dollars 12 9 6 3 0 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012 Source: U.S. Census Bureau
Montana Manufacturing Exports Export sales: ~$1.1 billion annually Machinery 15% Computers, Electronics & Appliances 5% Other 5% Chemicals 27% Decline in total export sales since 2011 Nonmetallic Minerals 7% Top export destinations: Canada 49% China 7% Taiwan 5.6% Korea 5.5% Belgium 4.5% Transportation Equipment 10% Petroleum & Coal Products 9% Food & Beverages 11% Wood Products & Furniture Metals 3% 8% Sources: wisertrade.org
Energy Use by Montana Manufacturers Energy use by the industrial sector declined steeply during the Great Recession, has not returned to prerecession levels. Industrial energy use is a smaller fraction of total than historically; residential & commercial energy use are increasing. Manufacturing accounts for about 25% of total energy consumption in Montana. Value of manufacturing output per amount of energy consumed has increased. Energy costs should be declining for Montana manufactures.
Natural Gas Use by Montana Manufacturers Billion cubic feet 50 40 30 20 10 - Industrial Natural Gas Use in Montana Use % of total 50% 40% 30% 20% 10% 0% 1960 1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 Percent of total natural gas use 2004 2008 2012 13 of 30 largest natural gas users in MT are manufacturers. About 380 industrial users. Industrial use has declined since recession. Sources: DOE-EIA and MT-DEQ
Electricity Use by Montana Manufacturers Billion kwh 8 7 6 5 4 3 2 1 0 1960 Industrial Electricity Use in Montana Use % of total 1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012 80% 70% 60% 50% 40% 30% 20% 10% 0% Percet of total electricity use Industrial share of electricity use declining for decades. Biggest manufacturing users: Oil refineries, forest products, REC Silicon, cement plants Sources: DOE-EIA and MT-DEQ
2014-2015 Montana Manufacturers Survey annual survey conducted in November open-ended & multi-choice questions current & coming year 178 firms participated cooperation rate 90%
Montana Manufacturing 2014 Recap Better than 2013 for most firms! Employment up at 33% of firms, down at 19%. Many firms reported increased production, sales, and profits. Few firms reported curtailments. 46% of firms did make a major capital expenditure.
Montana Manufacturing Forecast for 2015 Positive outlook statewide and across most sectors. Continued improvements anticipated. Modest growth expected in statewide employment & worker earnings. Health insurance costs and work comp rates remain major concerns.
Montana Manufacturers Outlook Trend 0.75 0.50 0.25 Employment Sales Overall 2007 2008 2009 2010 2011 2012 2013 2014 2015
Montana Forest Products Percent of Firms 80% Outlook for 2012 Outlook for 2013 Outlook for 2014 Outlook for 2015 76% 60% 57% 49% 49% 40% 32% 37% 41% 20% 11% 11% 15% 6% 11% 0% Better than last year Same as last year Worse than last year
Montana Forest Products 2015 Forecast U.S. homebuilding to improve & Canadian imports could start to decline. Output & sales should increase. Employment & worker earnings should also increase. Timber availability is the major constraint for Montana mills. Log prices may continue to increase. Without increased log supply, mill closures are possible despite stronger markets.
Montana Craft Brewing Industry Trends Category 2010 2011 2012 2013 2010-2013 Percent Change Production (bbl) 87,442 102,925 114,340 130,121 49% Sales ($ Millions) 21.8 26.1 29.4 33.9 55% Employment 231 320 388 486 110% Compensation ($ Millions) 5.2 6.4 7.9 9.5 84% Expenditures ($ Millions) 15.6 18.8 19.8 22.5 44% Source: Sorenson and Barkey (2014). Available online: http://bber.umt.edu/pubs/econ/mtbrewers.pdf
Top 5 States for Breweries per Capita State Breweries per 100,000 Adults 21+ 1. Oregon 6.3 2. Vermont 6.2 3.Montana 5.3 4. Colorado 4.7 5. Maine 4.7 Source: Brewers Association - www.brewersassociation.org
Missoula County Manufacturing 2013 Labor Income Other Nondurable Goods 7% Wood & Furniture 20% Food & Beverage 20% Labor Income: $93.2 million - 2011 $91.5 million - 2012 $100.5 million - 2013 Employment: ~2,345 Chemicals 13% Other Durable Goods 40% Sources: BEA-REIS; Census Bureau; and BBER estimates
Missoula Area Manufacturing Outlook Percent of Firms Outlook for 2013 Outlook for 2014 Outlook for 2015 60% 53% 50% 50% 40% 32% 39% 37% 20% 12% 11% 10% 0% Better than last year Same as last year Worse than last year
Lewis & Clark County Manufacturing 2013 Labor Income Chemicals 25% Transportation Equipment 33% Labor Income: $38.5 million - 2011 $42.4 million - 2012 $45.0 million - 2013 Employment: ~970 Other Goods 16% Printing 5% Wood & Furniture 6% Fabricated Metals 3% Food & Beverage 12% Sources: BEA-REIS; Census Bureau; and BBER estimates
Helena Area Manufacturing Outlook Percent of Firms Outlook for 2013 Outlook for 2014 Outlook for 2015 60% 56% 50% 40% 42% 44% 33% 33% 25% 20% 17% 0% 0% Better than last year Same as last year Worse than last year
Cascade County Manufacturing 2013 Labor Income Food & Beverages 45% Labor Income: $60.5 million - 2011 $64.3 million - 2012 $63.8 million - 2013 Employment: ~1,150 Furniture & Wood Products 7% Other Durable Goods 15% Other Nondurable Goods 29% Printing 7% Sources: BEA-REIS; Census Bureau; and BBER estimates
Percent of Firms 60% Great Falls & Havre Area Manufacturing Outlook Outlook for 2013 Outlook for 2014 Outlook for 2015 40% 41% 38% 45% 47% 46% 50% 20% 12% 15% 5% 0% Better than last year Same as last year Worse than last year
Yellowstone County Manufacturing 2013 Labor Income Petroleum Products 55% Chemicals 5% Labor Income: $263 million - 2011 $285 million - 2012 $282 million - 2013 Food & Beverage 9% Fabricated Metals 12% Other Durable Goods 15% Other Nondurable Goods 4% Employment: ~3,670 Sources: BEA-REIS; Census Bureau; and BBER estimates
Billings Area Manufacturing Outlook Percent of Firms 60% 53% Outlook for 2013 Outlook for 2014 Outlook for 2015 54% 40% 42% 32% 47% 41% 20% 15% 11% 0% Better than last year Same as last year Worse than last year 0%
Gallatin County Manufacturing 2013 Labor Income Printing 3% Textiles 2% Plastics & Rubber 4% Other Nondurable Metallic Non- Goods Minerals 6% 10% Wood & Furniture 7% Labor Income: $122 million - 2011 $123 million - 2012 $138 million - 2013 Food & Beverages 11% Fabricated Metals 15% Employment ~3,190 Other Durable Goods 33% Computers, Electronics & Appliances 13% Sources: BEA-REIS; Census Bureau; and BBER estimates
Bozeman Area Manufacturing Outlook Percent of Firms Outlook for 2013 Outlook for 2014 Outlook for 2015 60% 52% 50% 49% 45% 40% 39% 30% 20% 21% 7% 5% 0% Better than last year Same as last year Worse than last year
Silver Bow County Manufacturing 2013 Labor Income Wood Printing Products 1% 1% Other Nondurable Goods 4% Beverages 13% Labor Income: $45.0 million - 2011 $42.6 million - 2012 $45.4 million - 2013 Employment: ~750 Food 3% Fabricated Metals 3% Other Durable Goods 75% Sources: BEA-REIS; Census Bureau; and BBER estimates
Percent of Firms 80% Butte Area Manufacturing Outlook Outlook for 2013 Outlook for 2014 Outlook for 2015 69% 64% 60% 55% 40% 36% 27% 20% 15% 15% 9% 9% 0% Better than last year Same as last year Worse than last year
Flathead County Manufacturing 2013 Labor Income Wood & Furniture 43% Other Durable Goods 30% Labor Income: $152 million - 2011 $160 million - 2012 $173 million - 2013 Employment: ~3,320 Computers & Electronics 6% Other NonFood & durable Goods Beverages 7% 4% Fabricated Metals 10% Sources: BEA-REIS; Census Bureau
Percent of Firms 60% Kalispell Area Manufacturing Outlook Outlook for 2013 Outlook for 2014 Outlook for 2015 56% 50% 56% 40% 42% 32% 44% 20% 12% 0% Better than last year Same as last year Worse than last year 4% 0%
Richland County Manufacturing Total Labor Income: $23 million Total Employment: ~420
Sidney Area Manufacturing Outlook Percent of Firms 80% Outlook for 2011 Outlook for 2013 Outlook for 2015 60% 40% 60% 67% 50% 50% 40% 20% 17% 17% 0% Better than last year Same as last year Worse than last year 0% 0%
Custer County Manufacturing Total Labor Income: $3.8 million Total Employment: ~120