November 3, 2020
The first piece of major economic data to hit in November was a good one. According to the Institute of Supply Management Index, factory activity jumped in October, with new orders surging to their highest level in nearly 17 years. And for the first time since July 2019, manufacturing employment broke into expansion territory.
Is U.S. manufacturing coming back? Indeed, talking with some of the manufacturers in our portfolio—along with local leaders and economic development officials—it never fully left. States from Illinois to Florida have designated the month of October as “Manufacturing Month,” touting the industry’s essential role in advancing local economies, driving good jobs and inspiring innovation.
We know this to be true. As an investor focused on growing small businesses, we focus in on areas that have been hardest hit– traditional manufacturing communities, rural towns, urban cores and those places between the coasts where investment capital doesn’t reach. We also zero in on businesses and industries that hold the most promise for people: to earn a good living, advance their careers and build up their communities.
Manufacturing often hits the mark. It’s no longer old school: the manufacturing companies in our portfolio are spending on new technology, workforce training, and discovering new growth opportunities. Vineburg Machining, a precision fabricator in northern Nevada, has helped retain talent and put the area on the map for high-end manufacturing, through continued innovation and upskilling. Its core supplier relationship with Tesla, following the state’s investment in Tesla’s Gigafactory nearby, highlights the collateral benefits of job creation and opportunities for regionalized growth in innovative industries. (For more on Vineburg’s partnership with Nevada’s LEAP workforce development program, and to hear from employees like Michaela and Daniel, watch this one-minute video.)
Likewise, Global Cooling, maker of the Sterling Ultracold freezers, used to store lab samples and vaccines, has helped position southeastern Ohio’s Appalachian region as a leader in advanced manufacturing. And now, as the push for a COVID vaccine and the need for nationwide delivery infrastructure builds, the company is uniquely positioned to respond to the nation’s relief efforts. When other area businesses were cutting staff, Global Cooling kept employees on the payroll and continues to hire, while offering new skills and training to give employees the tools to advance.
Global Cooling isn’t the only manufacturer in our portfolio to respond and retool to the pandemic. JSI Store Fixtures in Milo, ME, like many other businesses, took a direct hit from COVID-19. However, the company – which produces merchandising displays for supermarkets — pivoted quickly to manufacture plexiglass hygiene shields to help stem the spread of the virus. This quick turn kept employees working, even providing overtime to help build a safety net many working class Americans lack. JSI brought on 15 new hires since September and today employs 294 full-time workers.
Many manufacturers have been able to keep production going and expand output, with reconfigured factories, new flexible work shifts, and employee health and well-being top of mind. In Magnolia, AR, like every other region in the country, school and daycare closures hit workers and their families hard, especially those on manufacturing floors where remote work was impossible. Recognizing this, along with other considerable family stressors faced by its largely female workforce, aircraft fuel cell manufacturer Amfuel secured childcare services and resources for workers and their families. It also instituted a second evening shift to accommodate employees who were unable to work during daytime hours. This added support kept paychecks coming, along with family-strengthening benefits such as health insurance, 401(k) with company match, and paid sick leave and vacation.
According to our mid-year 2020 portfolio company survey, even at the height of the COVID-19 spring/summer crisis, manufacturing companies held steady, supporting more than 5,000 jobs. Out of 75 manufacturing companies that responded, 91% offer accessible jobs – placing good quality jobs in reach for people without advanced schooling or experience. Nearly 7 in 10 provide employee training, boosting skills and developing new talent for the higher paying jobs of the future, or those in-demand fields such as machinery mechanics and CNC operators.
Overall, manufacturing accounts for just a little more than one-tenth of the U.S. economy, but its strength may be key to keeping the economy afloat, particularly as the COVID crisis continues to pull spending away from services. Looking at many of the manufacturers in our portfolio, their role in keeping the local community thriving is clear. We’re proud of these companies, the careers they shape and the communities they advance. While Manufacturing Month may have ended, our commitment to small manufacturing businesses is as strong as ever.
The investments, portfolio companies and recommendations listed on this website represent only a sample of companies that have received investment capital from Advantage Capital-related entities. It should not be assumed that recommendations made in the future will be profitable or will equal the performance of the securities highlighted herein or contained in any other information provided by Advantage Capital. Past performance is no guarantee of future results. For a full list of companies, please click here.
