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Montana manufacturing: bucking the national trend.

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Manufacturing in the United States in recent years has become a tale of decline and loss. "Americans don't make anything anymore," it's been said, as the economy has shifted away from producing cars and textiles toward producing services.

But Montana tells a different story. Since 2004, the state's manufacturing payrolls have gone up as national employment numbers in the same arena have stumbled. Montana's three top manufacturing industries--fabricated metals, machinery, and electrical equipment manufacturing--have seen employment rise by 40 percent. And the manufacturing payroll in the state in 2005 was a whopping $1.1 billion, even though most of the businesses are small.

Montana and the U.S. manufacturing economies parted ways strikingly beginning around the start of 2004, according to data gathered by the Montana Department of Labor and Industry, as part of the U.S. Bureau of Labor Statistics' Quarterly Census of Employment and Wages (QCEW) program (Figure 1).

As the figure shows, factory employment levels were stagnant well before the recession of 2001 officially got underway, both in Montana and in the nation. Both areas saw painful setbacks unfolding throughout the 2001-03 period as the manufacturing recession took hold.

But after tumbling almost 20 percent from its prerecession levels, Montana manufacturing employment has experienced steady gains since the end of 2003. In the first quarter of 2007, the most recent QCEW data available, the state's factory payroll employment stood at 20,382 jobs, which is 95 percent of the employment level of six years before. But since 2004, U.S. manufacturing payrolls have continued to stagnate, slipping to just 83 percent of 2001 first-quarter levels at the onset of 2007.

The turnaround in state manufacturing activity began a half year before the employment rebound got underway. Figure 2...

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