Econ 919 — Manufacturing a bigger section of the economy

Jan 23, 2020

When you think of economic drivers on the Kenai Peninsula, the manufacturing sector probably doesn’t jump first to mind. But it’s a broader category than you might think and has been holding steady even while other areas of the economy saw a downturn.

Alyssa Rodrigues is the director of Alaska’s Manufacturing Extension Partnership. She gave a presentation at the Kenai Peninsula Industry Outlook Forum held in Seward earlier this month.

She said that manufacturing in Alaska held its own during the recent recession.

“In 2018, we’re about where we were in 2005," she said. "Not a whole lot of movement. Which is kind of a good thing. Stability, especially when we have negative things going on in our economy, can be a really helpful thing to provide that resilience, that stability.”

The manufacturing sector includes food processing, which is mostly seafood in Alaska, but also home-grown food businesses, like ice cream, Taco Loco and here’s a familiar one on the peninsula:

“Beer. Beer is one of our really wonderfully growing sectors of manufacturing,” Rodrigues said.

Clothing manufacturing is growing in the state, as well as on the peninsula. The other big component in this sector is metal fabrication. That one has been particularly important on the Kenai Peninsula, with those wages compensating for seafood processing jobs, which is are typically seasonal and not usually highly paid.

“So we’re looking at total job numbers and then the wages," she said. "And I said earlier that fabricated metal was what was driving those wages up when we look at the borough any why manufacturing has higher wages here than elsewhere.”

In the larger economic picture of the borough and even Alaska, manufacturing plays a small part, only about 4 percent of GDP. But Rodrigues would love to see a lot more growth. Do you hear that, breweries, metal shops and clothing boutiques?

“It’s a really small sector but it’s a stable sector," Rodrigues said. "It’s a sector that has high-paying jobs. And so by increasing that sector as much as we can, we add resilience to our economy, we add diversity to our economy, and it helps us locally and it helps us as a state.”

Rodrigues thinks the key to seeing significant growth in manufacturing is exporting. Alaska, with less than a half-million people, just doesn’t have the customer base to support a manufacturing boom.

“But when we look at exporting to the Lower 48, exporting to other countries, then we’re turning manufacturing into a basic sector that brings money in, doesn’t just recycle it,” she said.

Manufacturing Extension Partnerships are a program initiated by the federal government to support the advancement of the manufacturing sector. Rodrigues says the Alaska MEP has the capacity to help any size Alaska manufacturers with a range of needs, from sales to deliveries, recruitment, strategic planning, cybersecurity, finding new markets and a lot more. Alaska’s MEP works within the University of Alaska Anchorage Business Enterprise Institute. Find out more here.

We’ve got two numbers for you this week, both in terms of employment and both from 2018, which is the last full year for which data is available.

First up, 807. That’s the number of manufacturing jobs in the Kenai Peninsula Borough.

The next is 3,917. That’s the number of jobs in 2018 in the borough’s largest sector of employment. Any guesses? That would be trade, transport and utilities.