Nationwide, domestic manufacturing is growing at the fastest pace in seven years, and that could translate into jobs in Colorado Springs — especially at small businesses.
The Institute for Supply Management reported that its index of manufacturing activity is at its highest level since 2004 — a big improvement from December 2008, when the index hit its lowest point in 30 years.
Jobs in the manufacturing sector grew 1.2 percent last year, according to the U.S. Department of Labor, and Moody’s Analytics anticipates more growth in 2011. The government expects about 330,000 new manufacturing jobs this year.
Colorado Springs can attract some of those thanks to its friendly business environment, said Mike Kazmierski, president and CEO of the Colorado Springs Regional Economic Development Corp.
“More than half our new prospects are in the manufacturing area,” Kazmierski said. “And over the past year, we’ve seen some companies move here. It’s a sector that serves us well. As the economy recovers, we’ve seen significant interest.”
Manufacturing companies already doing business in the Springs are stable, he said, after steep declines in both business and employment in 2008 and 2009. The EDC estimates there are 10,474 manufacturing jobs in the area.
“We’re seeing an increase in total manufacturing,” Kazmierski said. “But that sector, at least in Colorado Springs, is based on small business, small volumes.”
Many larger manufacturers have their products made overseas, he said. “So what we have are products that are mostly constructed in the U.S., mostly sold here,” he said. “Manufacturing in smaller volumes is something we do really well. We have quite a few boutique manufacturers in Colorado Springs, and they are looking to expand.”
Southern Colorado as a whole is attractive to domestic manufacturing companies, largely because of its solid talent base, Kazmierski said.
“Manufacturing today isn’t like it used to be,” he said. “You need highly trained, technical people. And we have that. We have a pretty solid work force.”
Lost-cost shipping helps. Colorado Springs is very close to a major rail hub in Pueblo and is central to the rest of the United States, making it cheap to move products from the area, Kazmierski said.
One company that seems to be recovering from the recession is Atmel, an international manufacturer of touch-screen technology products with offices in Colorado Springs. The company laid off 249 people at its local plant in 2008, started a hiring freeze and instituted a 10-day shutdown to save money.
But the rocky days of the recession may soon be a memory for Atmel. The company’s recently released fourth-quarter 2010 results showed higher-than-expected profits, sending its stock soaring 65 percent since November. Revenues for 2010 were up 33 percent from the fourth quarter of 2009, at $457.8 million. Locally, their website indicates they are hiring 30 new people.
“Our fourth-quarter results exceeded our expectations,” said Steve Laub, Atmel’s president and CEO in a press release announcing the results. “Microcontroller revenues reached new records.”
Others aren’t quite as optimistic. Dave Anderson, a business development expert and local businessman, questions the validity of the data from both the Institute for Supply Management and the U.S. Department of Labor. Anderson is the co-chair of the Coalition for a Prosperous America and former leader of the Colorado Springs Manufacturing Task Force.
“Manufacturing is not growing in the United States,” he said. The Institute for Supply Management, he says, “doesn’t do an effective job of measuring actual job growth and actual manufacturing in the nation.”
Anderson points to what he calls “unadulterated” employment data that show unemployment at the same level as a year ago, about 10.4 percent. He also says manufacturing is continuing its downward slide in the United States.
He places the blame on free-trade agreements, which he says place an unfair burden on U.S. businesses.
“These agreements have drained $6 trillion in manufacturing out of the U.S. economy, and put the trade deficit at a record pace,” he said. “Jobs have been lost too — 9 million of them.”
Other countries unfairly manipulate their currency, he said, and have a different tax base that includes adding tariffs to U.S. products in their countries. The United States does not add taxes or tariffs to foreign goods from nations with free-trade agreements. It puts the U.S. at a disadvantage, he said.
“Even in England, they place a 20 percent tax on our goods right at the port,” he said. “It’s difficult to compete. But we can deal with it, and restore between 2 and 3 million jobs at the same time.”
Changing the future for manufacturers means changing decades of policy in the United States, something that free trade proponents are opposed to.
“The people we trade with cheat,” he said. “It’s as simple as that. It’s time to build an engine, or we’re going to crash. We have to change the rules so we can compete, change policy that correspond to what other nations have.”