Heavy Metal - Central Minnesota's Strength in Fabricated Metal Manufacturing

by Cameron Macht - cameron.macht@state.mn.us
December 2010

Heavy Metal

Central Minnesota has a higher concentration of manufacturing jobs than the rest of the state, with the industry accounting for about 17.6 percent of all private sector jobs in the 13-county region. Through the second quarter of 2010 more than 1,200 local manufacturers provided 35,355 jobs and paid out more than $385 million in quarterly payroll. In comparison, manufacturing comprises 13.3 percent of private sector jobs in the state.

The region has a very heavy concentration of the fabricated metal product manufacturing specialty. With 5,721 jobs at 286 businesses spread throughout the region, central Minnesota has about 15.7 percent of the state’s total employment in fabricated metal product manufacturing (see Table 1).

 There were five main subsectors in the fabricated metal product manufacturing industry in central Minnesota, ranging from the region’s 379 jobs building boilers, tanks, and shipping containers to the 2,236 jobs at the 151 machine shops in the region. Almost 20 percent of the state’s machine shops were located in central Minnesota, as were about 18.5 percent of the state’s businesses and jobs in the architectural and structural metals subsector. This includes plate work and sheet metal work manufacturing, metal window and door manufacturing, and prefabricated metal building and component manufacturing.

Another large specialty in the region is other fabricated metal product manufacturing, which includes industrial, fluid power, plumbing fixture, and other metal valve manufacturing as well as ball and roller bearing and small arms ammunition manufacturing. In addition to providing 768 jobs, this was the highest paying subsector in the region with workers on pace to earn an average of just over $60,000 in wages in 2010.

All of these metal manufacturing subsectors dropped heavy amounts of cash in their workers’ pockets, with average annual wages that were more than $15,000 higher than the total of all industries in the private sector. On average, workers in the fabricated metal product manufacturing industry were on pace to earn just over $48,000 in 2010, compared to $32,188 for the average worker in central Minnesota.

Proving Their Mettle

Employment in the fabricated metal product manufacturing industry has already started recovering in central Minnesota. From the first quarter to the second quarter of 2010 metal fabricators added nearly 200 net new jobs, a 3.6 percent growth rate. That was slightly faster than the rest of the state, led by above average gains in Economic Development Region (EDR) 6E and EDR 7E (see Map 1). But data show that these manufacturers have typically seen an increase in employment from the first to the second quarter of each year.

What was more encouraging was the strength of the employment growth in the region so far in 2010, which was the highest comparative quarterly gain in the last five years. For central Minnesota the last time industry employment jumped as much as it did from first quarter to second quarter 2010 was in 2004, when employment rose 4.6 percent from the first quarter to the second quarter of that year (see Figure 1).

Year-over-year data show the same story. Statewide, fabricated metal product manufacturers still have slightly smaller payrolls than they did just one year prior, whereas firms in central Minnesota have increased employment nearly 1 percent from the second quarter of 2009 to the second quarter of 2010. While that adds up to just 50 additional jobs, it is a move in the right direction (see Figure 2).

If the past is any predictor for the future more job growth is likely ahead. As Figure 2 shows, the employment patterns during the last two recessions are very similar for the fabricated metal product manufacturing industry sector. Despite being labeled the “Great Recession,” the downturn has actually had less negative impact on employment in the region thus far, and local manufacturers are already adding jobs again.

In the two years following the 2001 recession fabricated metal product manufacturers sliced almost 1,000 jobs. From that point to the peak in the second quarter of 2008 the region gained almost all those jobs back, a 17 percent growth rate over five years. If history repeats itself, the region may be looking at another employment peak in the second quarter of 2015, with another 1,000 jobs created by local fabricated metal product manufacturers.

Help Wanted!

As any good investment adviser would point out, however, past performance is not a guarantee of future results. Instead, a more practical way to assess the job growth prospects of the fabricated metal product manufacturing industry is to look at current hiring demand.

Analysis of job postings on MinnesotaWorks.net, the state’s no-fee online job bank, shows that about 30 percent of current job vacancies in the region are in manufacturing, with positions ranging from assembly workers, welders, and CNC machine tool operators to cost estimators and industrial engineers,  production supervisors, and general and operations managers. Some of these jobs can be had with a high school diploma, on-the-job training, and related work experience; many others require some postsecondary education.

Over the first three quarters of 2010 the number of postings from manufacturing employers climbed more than 30 percent compared to the first three quarters of 2009, a gain of almost 800 additional job postings in the region. On top of that, openings jumped 28 percent at temporary-help services from 2009 to 2010, which often provide staffing to local manufacturers. In both cases MinnesotaWorks.net shows that demand for production workers is definitely on the upswing.

Getting Organized

Following a meeting of the larger Tri-State Manufacturers Association, some local manufacturing firms started talking informally to see if there would be any benefits in bringing that organization closer to home. Believing there would be sufficient interest in the region, the Central Minnesota Manufacturers Association (CMMA) was born in January 2008 at a very well-attended meeting in St. Cloud.

In just two years CMMA has grown to 107 member companies, all of which are listed on CMMA’s website: www.centralmnmanufacturing.com . According to the history section of the website, “since that encouraging start, CMMA has met monthly, with meetings typically consisting of informal networking and breakfast, followed by a brief business meeting, a guest speaker, and a tour of a manufacturing facility.” [1]

CMMA’s mission is to “serve as a unified, cooperative resource for its members. It will provide them a forum for sharing ideas and information and will assist in a dialog regarding the economic and social value of manufacturing to the public, educational institutions and government entities.” [2]

In addition to obvious benefits like networking, new business opportunities, and best practices, CMMA members also profit from the work of various committees. For example, the CMMA’s legislative committee maintains relationships with state legislators and advocates for CMMA members at the state capitol, public hearings, and other special events. The program and marketing committees schedule speakers, arrange the monthly meetings and plant tours, and create press releases and conduct media interviews.

Of particular note is the workforce development committee, which includes representatives from the Minnesota WorkForce Center system. According to the website “the workforce development committee is focused on the preparation and delivery of skilled labor to meet current and anticipated needs and opportunities in area manufacturing. The committee collaborates with industry, primary, secondary and postsecondary education partners to achieve this goal. The committee also serves to promote and advance manufacturing career awareness to citizens, schools and communities within CMMA’s service area.”

In an article submitted to the Manufacturing Matters Fall 2010 newsletter, CMMA board member Tim Zipoy of Central Minnesota Jobs and Training Services highlighted some of the committee’s successes from the past two years. For example, CMMA facilitated a “Tour of Manufacturing” in the spring of 2009 that invited the general public to visit and explore local manufacturing firms, an event that helped to change perceptions about the industry and introduce local workers to businesses that may need to hire them.[3]

CMMA also partnered with ISEEK.org to create a manufacturing-specific career website located at www.MnManufacturingCareers.org . Local job seekers, counselors, and students and their teachers can use the site to learn more about manufacturing careers, educational requirements, current trends and employment projections, insights on green manufacturing, and much more.

Zipoy sums up CMMA’s efforts by writing: “Despite current economic conditions, it is common knowledge that manufacturing is facing a looming skilled labor shortage. Public perception of manufacturing remains mixed with many still thinking it’s all dark, dirty and dangerous, and it’s subject to harmful foreign competition. Parents continue to be uninformed about the high wage, high skill, and high demand careers that manufacturing in central Minnesota offers. Teachers and counselors are still working with minimal tools to enlighten young minds about the excitement, challenges and rewards that jobs in manufacturing can deliver.” [4]  The members of CMMA are working to enhance central Minnesota’s strength in manufacturing.

[1]CMMA History. www.centralmnmanufacturing.com/index2.php?content=history
[2]CMMA’s Mission. www.centralmnmanufacturing.com/index2.php?content=mission 
[3]Zipoy, Tim. “Teamwork is the key to success for two recent workforce development projects.” Manufacturing Matters. Fall 2010 Newsletter.
http://centralmnmanufacturing.com/newsletter/cmma-newsletter-fall-2010.pdf 
[4]Ibid.

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