Montana's manufacturing industry.

• Author: Morgan, Todd A.

Despite the recent recession and extensive declines in wood products, manufacturing remains a substantial component of Montana's economy, with sales of $10 billion during 2010. The state's manufacturers employed 21,000 workers in 2010 (Figure 1), earning more than $1 billion in labor income (Figure 2).

The manufacturing sectors account for more than 20 percent of Montana's economic base, and prior to the recent downturn, four Montana counties each had more than 2,800 manufacturing employees and more than $135 million in labor income from manufacturing (Table 1). Recent declines primarily in the wood and paper products, primary metals, and machinery industries have dropped Flathead County below 3,000 manufacturing workers and Missoula County below 2,000.

The value of production rose in 2010 by an estimated $1.7 billion to approximately $10 billion. The increase was due to generally higher product prices and output across most sectors, with Montana's petroleum refineries accounting for the bulk of the increased sales value compared to 2009.

After substantial declines in employment during 2009, Montana manufacturing employment turned upward as 2010 progressed, with a net increase of an estimated 200 workers. Estimated workers' earnings in 2010 were approximately equal to the $1 billion reported for 2009. This is in contrast with the U.S. manufacturing sector, which had lower employment in 2010 versus 2009. The largest single loss in 2010 was the closure of the Smurfit-Stone Container pulp and paper mill in Frenchtown, dropping overall manufacturing employment by 400 workers. All other manufacturers combined added an estimated 600 workers.

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Looking at the past decade and comparing 2001 to 2010, total employment and labor income for 2010 are estimated to be lower than 2001 levels for manufacturing as a whole in Montana (Table 2). However, a number of sectors have shown growth over that period including chemicals, petroleum and coal, food and beverage, and a mix of manufacturers in the miscellaneous category, including high-tech and light manufacturing. Declines since 2001 were largest in Montana's wood and paper products industry (see pages 31-32) with segments of Montana's metals, machinery, and nonmetallic minerals manufacturers also suffering declines.

Outlook: 2011 and Beyond

The 2011 outlook is for modest improvement in Montana manufacturing activity, with expectations that the United States and other...