1. Manufacturing and the New Hampshire Economy Ross Gittell James R. Carter Professor University of New Hampshire

2. Manufacturing at Risk in NH Since 1984 manufacturing employment in NH has declined from about 116,000 to 85,000 or by more than 1/4th Manufacturing “recovered” during the 1990s …but at a level more than 10 percent below its 1980s peak. Over last 3 years NH has lost 1 of every 5 manufacturing jobs…. Higher than national and regional declines

3. Decline in Wood Products and Paper Manufacturing From 1998 to 2001...while NH overall employment grew over 7% –Wood Product manufacturing in NH declined 18% –Paper Product manufacturing declined 27%

4. New England Economic Project: NH employment growth expected to be higher than region and US in total and all sectors except manufacturing

6. How long can the state continue to have the strongest economy in New England and lose its manufacturing base?

7. Why Should we Care About Manufacturing in NH?

8. Why Manufacturing Matters… Manufacturing accounts for: –1 out of every 7 jobs in the state –1 out of every 5 payroll dollars in the state –8 of 10 NH counties have above US average employment concentration in manufacturing (compared to only 5 in leisure & hospitality)

9. Why Manufacturing Matters Manufacturing directly accounts for 22 percent of gross state product. This compares to 18 percent for services and 15 percent for trade. Overall manufacturing accounts –directly, in- directly and in induced effects -- for 40 percent of overall NH economy. Manufacturing in NH has high multiplier effects from supplier relations, high wages and export activities

10. Over 20% of payroll in the state from Manufacturing..as much as Retail and Health Care combined, five- times as much as Information Sector and Accommodation and Food Services

11. Employment Percentages…..manufacturing more important to NH economy than US or New England. NH ranks 14 of US states and 2 nd in Northeast in percent of employment in manufacturing..

12. Manufacturing pays well with relatively low educational attainment

13. Why should we care about Forest Industry?? Wood Product and Paper Manufacturing

14. Manufacturing in NH: Ranked by Employment Level

15. Why should we care... Woods products –.6% of total state employment –NH ranks 22nd among US 50 states in % of workers in wood products industry –average annual payroll of over $30,000 per worker

16. Why we should care.. Paper industry – over.5% of total state employment –NH ranks 20th among US states in percentage of total employment in paper industry –average annual payroll of over $37,000 per worker

17. Profile of NH Manufacturing

18. Highest relative concentration in NH compared to US

19. Most establishments

20. Largest average establishment size. (Overall NH has very similar average size of manufacturing establishment [43] as US average [45])

21. Highest pay per worker...

22. Ranked by Industry Wages Relative to US average in that industry (from high to low)

23. Across the state.. Manufacturing’s significant role..

24. Manufacturing employment concentration in NH counties is high compared to US average. All but 2 NH counties have above US concentration

25. Percentage of Total Payroll, in five counties manufacturing represents at least 1/4 th of payroll

26. How the mix of leading manufacturing industries varies by county, 5 of 10 NH counties have wood product or paper manufacturing as leading industry

27. Wood Product Manufacturing in NH Counties

28. In some NH counties forest industries provide the only good opportunity to earn good wages Coos and the paper industry Sullivan County has average annual payroll for all workers of about $26,000 compared to wood product’s per worker average of $over $32,000.

29. Looking Forward…

30. Exports and Trade Wood products are 6th highest exported good from NH, over $66.5M in 2002 Wood product exports growing YTD 2003 up over 5% from 2002 YTD Paper products are the 9th highest exported good from NH, over $26M in 2002

31. Growing Markets Wood Products –Exports to China grew from less than $1M in 2000 to over $2.5M in 2002 –Exports to Spain grew over 100% from 2001- 2002 but still low ($681,000)

32. Exports and Trade Canada is the main importer of NH forest products –60% of wood exports –62% of paper exports –but… Wood export trade with Canada flat since 2000 Paper exports with Canada down over 40%

33. Other Trade Vulnerabilities Wood Products –Trade with China year-to-date down over 40% (while it has increased to Japan over 100%) Paper Products –Down from over $50M in 2000 to less than $30M in 2002

34. What to do? Some thoughts Focus on product development and also pilot (new product) manufacturing.. …move away from mass production Leverage engineering talent in the state Industry Partnerships..with UNH and Dartmouth. Try to get Fed R&D funds to help seed and support innovative collaborate efforts Invest in skills and training of manufacturing workforce.. From K- 16+ get students interested in manufacturing …in making things and developing new products Alliances among NH manufacturers …with state and local government as facilitator and entrepreneurial in helping businesses connect and secure resources