Jon Rynn, author of the book Manufacturing Green Prosperity: The power to rebuild the American middle Class, wrote for the Roosevelt Institute 6 key reasons that explain why manufacturing is central to having a thriving local economy.
- Manufacturing has been the path to development. Many see the creation of a high-quality manufacturing sector as a strategic achievement.
- Manufacturing is the foundation of “great power”, meaning it isn’t enough to simply have factories and produce more goods, you have to know how to make the machinery that makes the goods.
- Manufacturing is the most important cause of economic growth. Just consider the explosion of the Internet, iPhones, and the like — all made possible by a small subset of production machinery called semiconductor-making equipment (SME), which itself is dependent on other forms of production machinery, such as the machine tools that grind the lenses they use or the alloys of metal the metal-making industries output.
- Global trade is based on goods, not services. According to the WTO, 80% of world trade among regions is merchandise trade — that is, only 20% of world trade is in services.
- Services are dependent on manufactured goods. Services are mostly the act of using manufactured goods. You can’t export the experience of using something.
- Manufacturing creates jobs. Most jobs, directly or indirectly, depend on manufacturing – And according to the Economic Policy Institute, each manufacturing job supports almost three other jobs in the economy.
As the conditions under the recent pandemic have taken shape, it has become clear exactly how important manufacturing is on the path to recovery. Knowing this, the Grand Junction Chamber quickly took action in early April to reach out to over 130 area manufacturers to offer assistance, listen to concerns, and provide overall support. Conversations focused on the direct impacts they were having due to the pandemic and specific resources that could immediately assist with reducing both operational and employee reductions. Many manufacturers took advantage of recent financial assistance programs including the EIDL & PPP loans and utilized the resources such as webinars and staff guidance as they navigated those programs.
Grand Junction Area Chamber of Commerce Business Retention & Expansion Director, C.J. Rhyne noted “The main focus of manufacturers was clear. They remain committed to keeping as many employees working as close to their normal hours as possible.” he went on to say that “often times putting that desire above profitability.” Rhyne also provided many manufacturers with programs to help educate their workforce on safe-practices in the hopes to minimize disruptions due to illness.
On Tuesday, the U.S. Chamber released the latest data on manufacturing from the Institute for Supply Management (ISM) showing the first monthly increase since January 2020. The index showed broad improvements including production, new orders, employment and pricing. While it is positive news, to continue the improvement the industry will need ongoing support to navigate these unpredictable disruptions.
In addition to the pandemic, challenges to the industry are often in the form of regulation. Local manufacturers were recently threatened by Colorado legislation’s HB1025 that would decrease the sales tax exemption on energy used in their production. The Grand Junction Chamber quickly worked on behalf of the local businesses community with over 15 hours spent to provide in-person testimony against the proposed bill and additional countless hours rallying businesses to send letters and provide remote testimony in opposition. Due in part to these efforts, HB1025 was killed in late May, providing much needed good news to the industry already facing challenges.
Echoing the U.S. Chamber and Roosevelt Institute, Grand Junction Area Chamber of Commerce CEO Diane Schwenke reiterated “Manufacturing pulls more than its body weight in bringing new dollars into our community from around the world.” she continued with the reminder that manufacturing “…generally offers higher wages and more benefits than some other economic sectors.”
These are all components that strongly add to the sentiment that manufacturing is and will continue to be a deciding factor on our successful path to recovery in the coming months, and the Grand Junction Area Chamber is committed to remain a strong ally in this industry’s success.