Manufacturing: Utah’s fifth-largest industry, new study shows

Pete CodellaNews

A report released today, commissioned by the Utah Governor’s Office of Economic Development, from the Kem C. Gardner Policy Institute, shows in 2018, Utah’s manufacturing industry provided 7.0% of total state employment and paid 9.6% of overall earnings. Additionally, the report stated it accounted for 11.0% of the state’s gross domestic product. The report also shows that despite a nationwide slowdown, Utah’s manufacturing industry continues to grow, though at a slower pace than some industries.

“The recent report released by the Gardner Institute demonstrates the significant contributions the manufacturing industry makes to Utah’s dynamic and strong economy,” said Ryan Starks, managing director of Business Services at the Governor’s Office of Economic Development. “Utah’s manufacturing industry is a crucial component of the state’s economic health and prosperity, and supports one-fifth of all jobs in the state.”   

In 2018, the total economic impacts of Utah’s manufacturing industry, both indirect and induced, included 427,980 jobs, $26.4 billion in earnings, and $44.0 billion in GDP. Overall, manufacturing supports one-fifth of all Utah jobs and one-quarter of Utah’s total GDP and earnings. The estimated total net fiscal impact is $605.9 million in state operating revenues. Much of these effects are concentrated in Salt Lake County and the urban Wasatch Front.

Highlights from the report include the following:

  • Employment — Manufacturing provides 143,461 jobs in Utah, the state’s fifth-largest industry. Approximately two-thirds of Utah manufacturing jobs are in durable goods. Manufacturing employment has grown 0.8% annually since 2008 but is outpaced by non-manufacturing industries’ 2.1% yearly growth.
  • Earnings — In 2018, Utah’s manufacturing sector paid $10.4 billion, the third-largest in the state. Average earnings in the manufacturing industry rank fourth at $72,565, 38.6% higher than the statewide average for all industries. Manufacturing earnings have grown an average of 1.4% per year, slower than the rest of Utah’s economy but much faster than the 0.2% national manufacturing growth rate.
  • Gross Domestic Product — At $19.6 billion in 2018, manufacturing is Utah’s third-largest source of GDP and the second-largest private sector industry. Manufacturing GDP has grown an average of 2.0% annually in Utah, twice the national rate.
  • Workforce Demographics — Compared with other occupations in the state, women are underrepresented in production jobs. More than twice-as-many men are employed in production occupations as women. Minorities are overrepresented in production occupations, with over one-third of production workers identified as non-White or Hispanic. The largest minority among production workers is Hispanics at 27.0%.

“Manufacturing is the engine that drives Utah’s economy,” said Todd Bingham, president of the Utah Manufacturers Association “With one of the highest wages and employment factors in Utah, the manufacturing industry provides high wages, creates opportunities for families, helps build communities and improves Utahns’ quality of life.”

The report focuses on the manufacturing industry as classified by the North American Industry Classification System (NAICS). Manufacturing is defined as “an industry made up of establishments that engage in the mechanical, physical, or chemical transformation of materials, substances, or components into new products.”

“The Kem C. Gardner Policy Institute was pleased for the opportunity to continue our ‘deep dives’ into important sectors of Utah’s economy,” said John Downen, deputy director of economic and public policy research at the Gardner Institute and co-author of the study. “Our analysts looked at manufacturing’s role in jobs, earnings, and GDP; how we compare with other states; manufacturing in rural Utah; and the demographics of production workers. The analysis revealed a very diverse industry, with establishments in all major types of manufacturing, from food and clothing to transportation equipment and electronics.”

The full report is available here.