Southeast Manufacturing – Still Struggling

by Christopher Rich

October 18, 2018

Southeast Oregon manufacturing lost 1,260 jobs from October 2004 to August 2014. The three-county area (Grant, Harney, and Malheur) saw employment for the industry fall 58 percent, from a high of 2,190 to a low of 930. As of August 2018, Southeast Oregon manufacturing has regained just one-fourth of jobs lost from 2004 to 2014.

The majority of manufacturing job losses were the result of several firms ceasing area operations or shutting down completely. Malheur County manufacturers were responsible for some very large and sporadic employment swings between 2001 and 2005. One large manufacturer closed its county plant in 2003 and another greatly curtailed its operations in 2005, but did not completely close. The remainder of the county’s losses came gradually from 2007 to 2014. In Harney County, the last two large manufacturers closed their doors during the Great Recession, leaving the county with virtually no manufacturing by 2009. Grant County also lost large manufacturers during the recession. Grant maintains roughly half the manufacturing jobs today that it did prior to the recession. Since March 2015, the Southeast’s total manufacturing employment has reversed course and is trending up. The industry topped 1,230 workers in August 2018. Roughly 90 percent of the jobs gained back have been added in Malheur County.  
As the industry withdrew, so did payroll. Manufacturing fed just over $52 million in wages into the Southeast’s economy in 2004. The industry’s total payroll was $18 million lighter by 2008 (not adjusted for inflation), the last year that payroll data was not confidential for each of the three counties. Since firm and employment losses continued until 2014, manufacturing’s total payroll was likely much smaller in 2014. Unfortunately, employment losses have created data confidentiality issues in each of the three counties. This prevents me from sharing further comparisons of the Southeast’s total manufacturing payroll over time. But some county level comparisons might help paint a clearer picture of where manufacturing payroll stands in the Southeast today.

Harney County’s 2005 manufacturing payroll was $9.2 million. The county had seven firms and average annual employment of 270. In 2011, this had fallen to a manufacturing payroll of $115,000 with three firms and average annual employment of 10. Little has changed for Harney County’s manufacturing industry since 2011.

Grant County’s 2006 manufacturing payroll was $8.6 million. The county had 10 firms and average annual employment of 260. In 2013, this had fallen to a manufacturing payroll of $5.3 million with seven firms and average annual employment of 140. In 2017, little has changed. The county had six firms and average annual employment of 130; payroll data is confidential since 2014.

Malheur County’s 2004 manufacturing payroll was $35 million. The county had 30 firms and average annual employment of 1,350. By 2015, this had fallen to a manufacturing payroll of $27 million with 28 firms and average annual employment of 850. In 2017, the county had 31 firms and average annual employment of 1,070 with a manufacturing payroll of $40 million. After adjusting for inflation, however, Malheur’s 2017 manufacturing payroll still lagged $6.5 million behind the 2004 payroll.

Although the trend has reversed and employment is growing, the Southeast’s manufacturing industry still has a mountain to climb. Industry employment in 2018 is at 56 percent of the area’s previous peak, with the majority of manufacturing employment in Malheur County. The total number of manufacturing firms was 39 in 2017, eight fewer than in 2006 when the number of firms was at its most recent peak. Far fewer of the firms today have large employment rosters.

Note: for this report, Harney County manufacturing employment was only counted in the three-county area total from 2001 to 2006 due to confidentiality. Therefore, total employment levels from 2007 to 2018 reflect only Grant and Malheur. In the scope of total manufacturing employment for the Southeast, Harney’s current level is negligible.


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