Report rips Nevada manufacturing, but local industry pros disagree

Nevada’s small manufacturing industry is failing, according to a Ball State University report, but local industry professionals sharply disagree.

The state received low grades in a handful of researched areas including logistics and global reach, according to the Ball State Center for Business and Economic Research report.

“Nevada is amongst the sixth smallest manufacturing states in the country,” said Michael Hicks, director of the center. “The state will struggle with attracting manufacturing firms.”

Manufacturers in Nevada make up about 4 percent of the state’s total output and employ more than 3 percent of the workforce, according to a National Association of Manufacturers report. When the recession hit, many of the state’s manufacturing jobs were the first to go.

Hicks said the state’s primary industries are gaming and tourism, so the lower manufacturing scores didn’t come as a surprise. He noted that Nevada’s human capital grade, which compares high school and college graduation rates as well as adult technical skills, could have contributed to that rating because it has been so low for so long.

“Gaming is taxed heavily, so (taxes) in other industries aren’t as heavy,” Hicks said, “but it’s not enough to overcome the human capital problems that plague the state.”

But the Nevada Governor’s Office of Economic Development disagreed. Jennifer Cooper, the office’s spokeswoman, said manufacturing is a targeted focus for Nevada’s economic development efforts.

“Last year, 41 percent of the companies approved by the GOED board were manufacturing companies, which speaks to the investment this industry is making in our state to not only grow but also to create jobs for Nevadans,” Cooper said in an email.

The Las Vegas Global Economic Alliance reiterated Cooper’s statement. Andrew Doughman, LVGEA spokesman, said in the past year, manufacturers have made up the largest category of companies looking to do business in Southern Nevada.

“Nevada is currently adding jobs faster than almost all other states, and manufacturing has contributed to our recent growth,” Doughman said, “So the actual data appear to contradict the findings of the report.”

Stephen Brown, director of UNLV’s Center for Business and Economic Research, questioned the value of a report that came from another state with a minimal knowledge of Nevada’s unique economy.

“I think there’s a real danger in sitting in Indiana and trying to make armchair comments on the Nevada economy,” Brown said. “I can understand where these numbers come from; we do have a small manufacturing sector. But I don’t think that owes anything to education. I think it owes more to history.”

Brown said Nevada was largely empty expanses of desert before the state decided it was going to promote tourism through gaming.

Rather than looking at gaming as a liability in terms of economic diversification, Brown said, “it’s actually one of the reasons why there’s much of a population in the state at all.”

The state’s logistics received a D rating, but Brown said he disagreed with that grade, too.

“I think that’s completely wrong,” Brown said. “We have flights to over 140 cities worldwide, including (South) Korea nonstop. Las Vegas is very well-connected.”

The valley also has a lot of warehouse space and is well-served by rail, he said, which should combat the low logistics grade. The city also has unrivaled convention space, which should speak to Nevada’s global reach rating.

“Do we export a lot? The answer is no,” Brown said, “But a lot of our tourists come from other parts of the world.”

The Nevada Manufacturers Association reports there is a high demand for manufacturing jobs in machine operation, welding and food manufacturing fields in the state.

Ray Bacon, the association’s executive director, said the building materials side of the industry took a huge hit with the housing market crash — specifically concrete — but it is slowly reviving.

“Before the recession, you couldn’t go anywhere in Las Vegas without seeing a concrete truck, but those days are gone,” Bacon said. “Thirteen-hundred jobs are back, but 11,000 were gone.”

Bacon said the state’s manufacturing sector is affected by Nevada’s notoriously low human capital ratings, but that the industry is taking steps to improve it.

The association is currently working with six career and technical high schools in Southern Nevada as well as similar schools in other areas of the state to improve training programs.

Southwest Career and Technical Academy, one of the schools pumping out skilled manufacturers, reported a 99 percent graduation rate this year, Bacon said. The school also reported a 95 percent enrollment rate in post-secondary programs.

“We have been behind for decades, and the recession was the first time the state got slapped across the face and realized we need to make changes,” Bacon said. “The career and technical programs are working.

“We don’t have enough of them, but they’re working, and we’re churning out kids that are college and career ready.”

Contact Rachel Crosby at rcrosby@reviewjournal.com or 702-387-5290. Find her on Twitter: @rachelacrosby