<< Previous   of   Next >>

ADVERTISEMENT

CONTACT SCBJ Kurt Batdorf, Editor kbatdorf@scbj.com

State’s manufacturers express mixed views on 2011

By John Wolcott
SCBJ Freelance Writer

LYNNWOOD — Impact Washington’s recent economic survey of manufacturers across the state reveals a mix of pessimism and optimism about the 2010 economy, with larger firms expressing more positive views, particularly companies involved in international trade.

“This first survey gives us much more understanding about the issues facing manufacturers in Washington, particularly those issues that keep them up at night, the challenges they’re most concerned about,” Nigel Moore, vice president and chief operating officer for Impact Washington, said in an interview after a Nov. 18 presentation of the study at Lynnwood’s Embassy Suites

The Mukilteo-based organization, previously known as Washington Manufacturing Services, is a resource for manufacturers on production processes, new growth strategies and exporting programs, as well as related economic issues.

During August and September, Impact Washington contracted with Public Opinion Strategies, a Washington, D.C., polling agency, to conduct the survey of more than 400 manufacturing company owners, chief executives, chief financial officers, presidents and managing officers in the state from all regions, sectors and company sizes.

“The study, which will be repeated each year to show trends, gives us new ideas about how to help manufacturers through our expertise, our contacts with state and national agencies and our understanding of manufacturing and exporting,” Moore said. “The information also enables us to tell others what we know about the state’s manufacturing industry, such as concerns about access to capital, government regulatory issues, taxes and permitting.”

More than 250,000 people, 8.5 percent of the total state work force, are employed in manufacturing jobs that support an additional 750,000 service and support jobs, according to the survey. Matt Smith, Snohomish County Economic Development Council vice president, told the audience that manufacturing in Snohomish County accounts for 23 percent of county employment.

Among the manufacturing industry’s greatest concerns were the cost of health-care coverage (74 percent); federal, state and local taxation (62 percent); federal government policies and regulations (60 percent); state government policies and regulations (56 percent); financial stability of key customers (42 percent); and the quality of the state’s education system (40 percent), although colleges and universities are rated more highly than elementary and secondary schools.

Most of the respondents reported problems with slower paying customers (64 percent) and difficulty finding qualified candidates to hire (48 percent). Of those respondents, 21 percent said it was “very difficult.”

Despite the somewhat somber tone of the survey’s results, Moore said the study reveals “a definite up-tick” in manufacturing activities and outlook, even though many smaller businesses are “sitting on their hands” and working to preserve their present situation until the economy improves.

Statistically, the results showed that 64 percent of the respondents believe “the business environment in the state is on the wrong track,” while 71 percent in the northwest sector believe that statement.

Looking over the troubled economic landscape, 51 percent statewide expect a “flat” economy, 29 percent see continued recession and 14 percent see economic expansion. However, 70 percent are “confident” about the financial future for their own firm, with 22 percent of that group claiming to be “very confident.”

Worries about recession were of more concern (30 percent) to businesses with revenues under $1 million a year but less concern (20 percent) for those with more than $5 million in revenue. More than half of those with revenues of less than $1.5 million (58 percent) see a flat economy, as do 51 percent of those with more than $1 million in revenues and 45 percent of those with revenues of more than $5 million.

In line with those feelings, 50 percent of companies with 50 or fewer employees see a flat economy, while 56 percent of those with more than 50 employees see the same stationary level.

Still, 85 percent of companies with revenues of $5 million or more and 86 percent of those with more than 50 employees were confident about the financial future of their businesses.

Troubled areas of the state are less confident about the economy, with brighter outlooks topping out at 91 percent in southeast Washington, 76 percent in the northwest sector and 71 percent in the central and northeast sectors. In contrast, optimism in the Olympic Peninsula region reached only 58 percent and measured just 43 percent in the southwest sector.

Statewide, only 27 percent of the companies expect to see gross revenues increase by mid-2011 and only 25 percent expect to see profits grow.

The survey also found that businesses involved in shipping products internationally were more likely to have a more favorable view of the economy than those who don’t export. Twenty-four percent of the companies that export at least some of their products expect to see economic expansion for their firm, compared to just 11 percent of firms that don’t export.

Presently, only 13 percent of the state’s manufacturers export more than 10 percent of their products, which the study sees as an area with tremendous growth opportunity that Impact Washington is expected to focus on by familiarizing businesses with the organization’s state and federal export grant initiatives.

On the Web

For more information, including full details of the inaugural 2010 study of “The State of Manufacturing in Washington,” visit www.impactwashington.org or call 425-438-1146.