While other states from coast to coast seek to build and expand its economy around its manufacturing sector, Colorado continues to be ahead of the pack, according to a recent analysis. What's the Centennial State's secret? A state industry expert tells all.
Industrial employment in Colorado posted a gain for the third year in a row, a recent analysis suggests.
The Colorado Manufacturers Directory reports the state gained 3,513 industrial jobs – or 1.7 percent – between June of 2012 and June of 2013. That’s one and a half percentage points above the national average gain as reported by the U.S. Labor Department for the same time period.
The analysis now says Colorado is home to 6,510 manufacturers and 210,050 related jobs.
“Colorado’s manufacturing sector continues to grow,” explains Tom Dubin, President of the Evanston, Ill.-based publishing company, which has been surveying industry since 1912. “The state’s winning mix of an educated workforce, friendly business environment, and abundant natural resources has helped the state to boost exports and expand hiring.”
The directory is an industrial reference published annually by Manufacturers’ News, Inc. (MNI), the nation’s oldest and largest compiler and publisher of industrial directories and databases.
According to the report, the following events highlighted another successful year in manufacturing for The Centennial State:
- The expansion of Epic Brewing’s brewery in Denver;
- The recent announcement that a joint venture of ConAgra Foods, Cargill, and CHS will open a headquarters in Denver under the name of Ardent Mills;
- The expansion of Terumo BCT’s manufacturing location in Lakwood.
In addition, recent reports show Colorado increased its exports by 11.3 percent in 2012, a record for the state and more than triple the national average gain for the same time period. Tim Heaton, President of the Colorado Advanced Manufacturing Alliance (CAMA), explains that there are several reasons why the state continues to be a powerhouse in terms of annually generating growth in manufacturing employment.
First, he says Colorado’s manufacturing base is anchored by a number of industry titans that “are vital to a healthy manufacturing ecosystem,” including: Woodward, Lockheed Martin, Ball Corporation IBM, Coors, Raytheon Hughes and Johns Manville.
Second, Colorado is a breeding ground for innovation, Heaton says – and the U.S. Chamber of Commerce agrees. In a recent analysis, the Chamber ranked Colorado No. 2 nationwide in innovation and entrepreneurship, just a notch below top-ranked Maryland.
The Chamber also placed Colorado second in high-tech share of all businesses, fourth in business birthrate, fifth in STEM job concentration, seventh in infrastructure, and eighth in business climate.
But the list of accolades does not end there.
Colorado ranked seventh in Fast Company’s report on top states for innovation in 2013, and the state ranked fourth in the Miliken Institute’s State Technology and Science Index.
And five Colorado cities – Boulder, Fort Collins, Loveland, Denver, and Colorado Springs – made the Ewing Marison Kauffman Foundation’s list of the top 10 metro regions in the U.S. with the highest ratio of tech startups compared to the national average.
“This combination of strong traditional manufacturers with innovators creating new products in the medical and renewable energy sectors make Colorado ideal for manufacturing,” Heaton explains.
A MAGNET FOR MANUFACTURERS
According to the industrial directory, electronics manufacturing remains the state’s largest sector by factory employment, accounting for 24,103 jobs, up about a half of a percentage point over the year.
Food product manufacturing accounts for another 24,010 jobs, up one percent. Third-ranked industrial machinery and equipment employs 21,200 workers, up 7.5 percent.
Other industrial sectors that gained jobs include:
- Oil and gas extraction, up 7.9 percent;
- Petroleum products,up 3.5 percent;
- Stone/clay/glass, up 3.3 percent;
- Instruments/related products, also up 3.3 percent;
- Fabricated metals, up 2.3 percent;
- Transportation equipment, up 1.7 percent.
Northeast Colorado, according to the analysis released earlier this year, accounts for 134,770 of the state’s industrial jobs, up 1.2 percent over the year. Northwest Colorado, meanwhile, accounts for 62,114, up 3.9 percent over the survey period. And while the state’s southwestern region is home to 6,946 industrial jobs, down 3.8 percent, its Southeastern zone is home to 6,220, up the most at 4.9 percent.
“Colorado’s low energy costs are appealing for energy-intensive industries such as the plastics, metals forming, and machining sectors,” Heaton adds.
MNI reports Colorado’s top cities by manufacturing employment all posted gains over the year. Denver, for instance, remains the state’s top city for manufacturing employment with 41,070 industrial workers, up 1.9 percent. Second-ranked Colorado Springs accounts for 18,046 jobs, up 1.6 percent, and third-ranked Englewood has 13,641 industrial workers, up a half of a percentage point.
And according to Heaton, between 2009 and 2011, the food, plastic, and beverage sectors gained jobs in nondurable manufacturing, while the machinery, primary metals, electrical equipment, and fabricated metal sectors posted gains in durable goods manufacturing.
“These sectors, in particular, have been tireless in their effort to improve their efficiency and effectiveness of their operations, making them competitive in the worldwide market,” Heaton says. “This has allowed Colorado companies to take part in reshoring opportunities, which is paying off in new business. For example, when the Fort Collins-based company OtterBox made the decision to produce its iPhone case in America, other Colorado companies benefited.”
Heaton adds that Colorado was one of only 11 states to grow its exports in double-digit percentages between 2011 and 2012.
“Whether it is our beverages, electronics, robotics, aviation and aerospace or medical devices, Colorado has a number of products that are in demand around the country,” he says.
Colorado’s silver-medal honor from the Chamber in innovation and entrepreneurship, according to Heaton, is kudos to its strong education system.
He says 36 percent of the state’s population over the age of 25 holds a bachelor’s degree or higher, making Colorado second to only Massachusetts for the nation’s most highly-educated workforce.
Additionally, he says, Colorado is home to the top-scoring students in ACT and SAT tests and third in the nation for a concentration of high-tech workers.
“This makes Colorado an ideal place for the advanced manufacturing companies in aerospace such as Serra Nevada Corporation Space Systems, bioscience and medical devices such as Terumo BCT, Mountainside Medical, Gambro, and many others,” Heaton explains. “Adding to this educated workforce is our research universities and national laboratories, such as the National Renewable Energy Lab, that makes Colorado well-equipped to meet the demands of the advanced manufacturing sector.”
What’s more, Colorado has become something of a national model for regionalism in economic development and political cooperation, Heaton says, crediting Tom Clark, President of the Metro Denver Economic Development Corp., for his efforts in spearheading this regional cooperation.
Its regional economic development practices, Heaton adds, have been closely studied by a number of regions worldwide including British Columbia, China, Denmark, Germany, Ireland, Kazakhstan and the United Kingdom.
Heaton says these factors have been large, instrumental reasons why manufacturing – and the jobs it supports – has consistently grown in Colorado despite the turbulent economical winds of recent years.
“Combine this with the leadership of Gov. (John) Hickenlooper and his Economic Development Team, and their economic development blueprint, and you see how manufacturing has grown in Colorado,” Heaton says. “In fact, manufacturing output has grown faster than overall output.”