Manufacturing puts city ahead of West Coast peers
Portland Business Journal - by Matthew Kish Business Journal staff writer
New federal data shows manufacturers supercharged the Portland economy the past five years and helped the city outperform its West Coast peers.
Released late last week by the U.S. Department of Commerce's Bureau of Economic Analysis, the new data tracks the gross domestic product of more than 350 of the nation's largest metropolitan areas.
It shows that manufacturing was a $22.7 billion business in the Portland area in 2005, up 89.8 percent from 2001.
It is now responsible for 24.9 percent of the local economy, a 9.4 percent increase since 2001.
The data includes high- and low-tech manufacturing, but does not break down GDP by sub-industry.
To put the gains in perspective, manufacturing accounts for 18.9 percent of Detroit's economy, meaning Portland now relies on pounding aluminum and fabricating metal more than the Motor City.
As a result of the robust manufacturing sector, Portland's overall economy landed in the second quintile for growth among West Coast metro areas between 2004 and 2005.
It also outperformed most cities for the duration of the data. The total gross domestic product for the metro area, which includes Portland, Vancouver and Beaverton, is now $91 billion, up 17.9 percent since 2001.
The aggregate GDP of the more than 350 cities tracked only grew 11.1 percent.
"We have a diverse manufacturing base here that is a little bit of everything from aerospace to rebar," said Norm Eder, a partner at Conkling Fiskum & McCormick and executive director of the trade group Manufacturing 21."
"If you get a bad patch the whole thing doesn't go down like it does in Detroit or Pennsylvania," he added.
Experts say several factors contributed to the growth of Portland's manufacturing base, and by extension, the regional economy.
Much of the growth is in the city's metals manufacturing industry, which includes stalwarts like Chicago-based Boeing Co., which operates a plant in Gresham, and Portland-based Precision Castparts Corp.
Precision, for instance, has more than doubled in size the past several years, growing from a $2.3 billion company in 2001 to sales of $5.36 billion in its most recent fiscal year.
The aerospace and metals manufacturer will likely become the state's second member of the Fortune 500 next year. Nike Inc. is the only current member.
Other metals companies are also enjoying booming business.
Portland-based Schnitzer Steel Industries Inc. posted the best returns of any Oregon public company in 2006, with a 117 percent gain in revenue to $1.86 billion.
Observers say the diversity of the state's manufacturers helps the industry weather down years.
Local companies make products as varied as pipes and motor homes.
Some credit Eder's group, Manufacturing 21, with organizing manufacturers and raising their profile with local leaders. The group was formed nearly four years ago with 11 original members.
It now has 80. Eder is the group's only paid employee.
"There seems to be a growing awareness of the [metals] cluster and just how important it is," said Mark Nelson, executive director of the Oregon Metals Industry Council, another trade group.
The groups scored big legislative victories this year in Salem and Washington, D.C., landing a $2.5 million Congressional appropriation for small manufacturers and another $2.87 million from the state to address manufacturing competitiveness.
Both Eder and Nelson say the Portland Development Commission has also been critical to the success, both through its use of enterprise zones to provide tax incentives and its targeted work on the city's metals industry.
In order for manufacturers to continue the hot streak, insiders say they need to address the looming work force shortage.
"It's the bottleneck on our business," said Geoff Gilmore, CEO of Newberg-based Climax Portable Machine Tools Inc., which makes portable heavy equipment.
The company is growing more than 50 percent annually and can't find enough machinists.
It hired 40 last year and could have hired another 25, but Gilmore couldn't find qualified workers.
He eventually took the unusual step of moving one machinist and his family here from Wyoming, a perk historically reserved for senior executives.
The area's roads and bridges also need improvement, Nelson said, an issue that he will soon ask the Legislature to address.
"You can't put steel beams on a TriMet bus," he said.
mkish@bizjournals.com | 503-219-3414
http://portland.bizjournals.com/port...ml?t=printable
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