Lane County Manufacturing: More than the Sum of its Parts

Lane County Manufacturing: More than the Sum of its Parts

by Henry Fields

July 27, 2017

Manufacturing makes up an important part of the Lane County economy, but this diverse sector can defy easy characterization. For economic purposes, a business is part of the manufacturing industry if it makes anything from granola to Geiger counters, even though its supply chain, customers, and market outlook may be entirely different from other manufacturing companies.

Analysis of the industry as a whole can therefore miss big changes and important trends within subsectors. That is especially true in Lane County: how manufacturing has changed here in the recent past depends on which perspective you take.

The graph shows indexed employment for the three largest manufacturing subsectors by number of jobs in our area: wood products, food, and machinery.

Indexed employment measures growth and decline relative to a standard base year. In this graph the number of jobs in the year 2001 in each subsector is set at 100. A level of 150 in a given year indicates 50 percent more jobs in that year than the subsector had in 2001, whereas a 75 would indicate 25 percent fewer jobs.

These manufacturing subsectors travelled divergent paths over the last 15 years. Wood products employment declined steeply before and during the Great Recession, and has remained relatively unchanged since that time. Employment in machinery manufacturing also declined in the late 2000s, but has made up a good portion (though not all) of the losses. Food manufacturing employment scarcely declined at all during the recession, and grew over nearly the entire period.

Relative job growth and decline isn’t the whole story, though. A second slice of data shows these same subsectors’ wage levels and growth characteristics.

Wood product manufacturing remains by far the largest subsector in terms of number of jobs despite the decline in employment over the last 15 years.

All three subsectors have higher average wages than the Lane County average for all industries ($41,253) and all have seen wage increases since 2001 after accounting for inflation. Food manufacturing has seen the sharpest wage rise, but remains the lowest paid of the three subsectors.

As you can see, trends differ substantially between the subsectors. Answering questions about how the manufacturing industry is doing requires some clarifying questions. What elements are most important to economic health: high wages or wage growth? Total job numbers or recent trajectory? These are of course only a few of the relevant data points to consider when looking at local industry strength.

Differences in wages and job growth notwithstanding, one can still gain important insight by asking questions about the manufacturing industry as a whole, which we do often here at OED. But especially at the local level, answering “what’s happening in manufacturing?” might require a deeper look at the diverse components of the sector.