Benton & Franklin Counties’ Manufacturing Industry Doubles Over Past Five Years

Published in the April 2011 edition of the Tri-Cities Area Journal of Business

by Mary Hopkin
April, 2011
Tri-Cities Area Journal of Business

Linda Vasquez of Manufacturing Services in Kennewick holds two circuit boards next to each other and carefully studies them, comparing each tiny filament, wire and weld.

For 32 years, Manufacturing Services has been crafting circuit boards and doing mechanical and electronic assemblies for Mid-Columbia companies like ESTeem Wireless Modems, Bruker Handheld, PNNL and Cadwell Industries.

Manufacturing Services is a small, family-owned company that makes a big contribution to the Mid-Columbia economy.

According to statistics provided by the Washington Department of Revenue, the Gross Business Income of manufacturers in Benton and Franklin counties reached more than $612 million in 2010. In addition, the manufacturing GBI in the counties has doubled since 2006, when it topped $304 million.

And those numbers don’t tell the entire story, said Mike Gowrylow of the Department of Revenue.

“The information is based on manufacturers with a mailing address in (Benton and Franklin counties) – and generally where they are based,” he said. “It will not include businesses that are headquartered somewhere else but may have a facility in these counties.”

Food manufacturing is the largest segment of the manufacturing industry in Benton and Franklin counties, accounting for nearly $265 million in 2010, compared to $97 million in 2006.

But computer and electronic product manufacturing came in second, with those companies collecting more than $116 million in gross business income last year, compared to about $88 million in 2006.

Chemical manufacturing came in third, with $68 million in gross business income last year, compared to about $3.5 million in 2006.

John Vicklund, president of Impact Washington, a nonprofit manufacturing (organization), said manufacturing is a vast industry with many different sectors, so encapsulating information of it as a single broad industry is difficult.

“It covers everything from aerospace to food processing – and each sector is doing differently,” he said.

Vicklund said that during the recession, 2008-2009, many manufacturers “hunkered down,” – holding onto status quo. But according to a survey completed by Impact Washington last fall, the state’s manufacturers seem a little more optimistic.

“Companies have started to look around and say, ‘we see some stability, don’t know that the economy will recover to where it was before but we aren’t going to wait for someone to provide a solution; we are going to see what we can do to grow our biz,’” he said.

Michael Brown, owner of Manufacturing Services, said in 2007, his company had its best year up to that date – but things slumped in 2008 and 2009.

“Customers had inventory and weren’t moving it as fast,” Brown said.

So they weren’t calling as often to order new components.

But the phone started ringing again – in earnest – in 2010.

“From 2009 to 2010, we saw 60 percent growth and beat our previous record by 20 percent,” said Brown, who has added 11 people to his staff since 2007, bringing his total number of employees to 33.

Brown doesn’t expect that kind of growth this year, but he isn’t pessimistic either.

“We could easily grow by 10 percent this year,” he said. “We’ve got a few new smaller accounts.”

Vicklund said the health of the state’s economy ties directly to the health of the state’s manufacturing industry. And his organization is working hard to help small manufacturers grow.

Vicklund said much of that new growth could come from outside the country.

“One of the things we are working hard on right now is helping companies that are domestic suppliers become exporters,” he said.

Vicklund said that nationally only 2 percent of companies export and in Washington, 4 percent of businesses send products overseas.

But Gov. Chris Gregoire wants to increase the number of companies that export by one-third over the next five years. She has tapped Impact Washington to help meet that goal.

“We have received grants to help companies that only sell domestically to help them look at potential markets for their products and see if they can’t align themselves with other markets,” he said. “Our intent is to identify 100 companies this year that don’t currently export and work with them. By the end of the year, we want to have 35 of them exporting.”

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