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Updated: April 29, 2019 Manufacturing

After years of decline, manufacturing in Maine is in a modest upswing

A line graph depicting manufacturing’s workforce in Maine over the past 25 years is not a pretty sight. From 1995, the manufacturing sector was in a steep steady decline for 15 years, falling from 84,700 jobs at the start of 1995 to 51,000 jobs in 2010. It levels off at roughly 51,000, with slight seasonal dips and rises, until the end of 2018, when it begins a modest rise.

At least for now, manufacturing’s workforce is growing — with February’s 53,400 manufacturing jobs recorded by the U.S. Bureau of Labor Statistics being 2,000 more jobs than the tally at the start of 2018.

It’s not quite time to bring out the champagne, but it is a noteworthy gain for a business sector that 60 years ago accounted for 43% of the nonfarm jobs and had fallen to 8.1% of Maine’s nonfarm jobs by the end of 2017. Especially, if the job growth trend continues.

According to a research brief from the Maine Department of Labor’s Center for Workforce Research and Information, Maine’s manufacturing sector lost 13,500 jobs in the 1990s and 28,800 jobs in the 2000s up until the plateau mark of 51,000 in 2010. Since 2000, according to the research brief, the largest losses were in forest products (paper and other wood products), apparel and leather products, computer and electronic products and textiles. Those declines were due to many factors, including continued transfer of production of labor-intensive goods such as shoes and apparel to other countries, the increased use of technology and the impact of two recessions.

In addition to the recent upturn in manufacturing jobs, here are some numbers gleaned from the 2018 Maine Manufacturing Summit Report compiled by the Manufacturers Association of Maine that highlight the importance of the manufacturing sector to the health of the state’s economy:

  • Annual contribution of $5.3 billion, or roughly 9% of the state’s gross domestic product.
  • 1,800 businesses, most being of small-to-medium size, employing more than 53,000 people with a payroll of approximately $2.7 billion (which accounts for 13% of statewide wages paid).
  • Average annual salary is $56,400, which is 32% more than Maine’s average wage in nonfarm sectors.

Maine’s pulp and paper mill jobs have been in a long decline since 1994 — reaching what everyone hopes was the low-point, between 2014 and 2016, when five mills closed: Verso Paper, Bucksport (500 jobs); Great Northern Paper, East Millinocket (200); Old Town Fuel & Fiber, Old Town (200); Lincoln Paper & Tissue, Lincoln (170); UPM Madison, Madison (214).

A chart from the March 1995 issue of Mainebiz shows a dramatic five-year drop in manufacturing jobs.

But as Patrick Strauch, executive director of the Maine Forest Products Council, told a full house of Maine lawmakers at the council’s legislative breakfast early this year, upwards of $600 million in capital investments have been made or announced in the forest products sector in the past few years.

Among those investments are the $200 million Sappi North America Inc. invested at its Somerset Mill in Skowhegan with roughly $175 million going toward a newly rebuilt Paper Machine 1 that adds new paperboard packaging grades to the mill’s capabilities and boosts its global competitiveness. About $25 million was invested in the mill’s wood yard to optimize its efficiency and reduce costs.

Photo / Courtesy of Sappi
Sappi North America Inc. invested $200 million at the Somerset Mill in Skowhegan to increase production capacity by almost 1 million tons per year.

Another significant paper industry investment, which resulted in the creation of 80 new jobs in Washington County, is the $120 million investment in 2016 by International Grand Investment Corp., a U.S.-based company owned by a Chinese investment firm, to install two new tissue-making machines at the new St. Croix Tissue mill in Baileyville.

And in October 2018, a newcomer to Maine’s paper industry, ND Paper LLC, announced its purchase of the shuttered Old Town pulp and paper mill just two days after announcing a two-year, $111 million investment at the Rumford paper mill it purchased in June 2018. The company is a wholly owned subsidiary of Nine Dragons Paper, based in China and the largest paperboard producer in Asia.

“We really feel like we’re at the beginning of a big upturn in the opportunities for the industry,” Strauch said. “We need to make sure we’ve got good, trained workers, but it’s an exciting time and we’re part of the new, green forest economy.”

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