Costs are rising but businesses keep coming, expert reports

Manufacturing continues to grow in Northern Nevada, surpassing other states and strengthening a key sector in the capital city.

An economic report released Friday shows a record number of new and expanding companies have contributed about $330 million to the region during fiscal year 2005-2006, a 24 percent increase from last year.

"One thing that's surprising is our continued strength in manufacturing," said Chuck Alvey, president and chief executive officer of the Economic Development Authority of Western Nevada. "I think Carson City has the highest concentration of manufacturing in the state, and we're the only state in the country that's had manufacturing job growth."

Manufacturing led all other sectors with 20 companies relocating or expanding in Northern Nevada, followed by 13 distribution companies. Northern Nevada also saw 13 service sector relocations or expansions, which is more than double the number reported last year.

Eleven of the 25 new businesses relocated from California. Others came from Texas, Pennsylvania and New Jersey. The 19 companies that expanded in the area contributed more than half of the $330 million economic contribution.

The development authority's report only counts primary business in Washoe, Storey, Lyon and Douglas counties. A primary business is one that imports new dollars into the region by exporting goods and services, Alvey said.

Northern Nevada Development Authority covers the Carson City area, which is why it isn't included in the report. But in the last fiscal year, Carson City had three expansions with hefty economic contributions: Vitamin Research with $3.5 million; Cheetah Learning with $4.6 million and Basalite with $3.7 million.

Gordon Hinkel, general manager of Basalite Concrete Products, said Friday that his business is fueled by the construction industry.

"There is a lot of manufacturing moving here to take care of those opportunities," he said. "I believe it's all the growth driven with the strong economic condition in Northern Nevada. People are looking at Northern Nevada and seeing opportunities."

The 2600 Boeing Way plant is adding 75,000 square feet to manufacture landscaping products in addition to concrete blocks for the building industry. That adds up to 14 new jobs and $14 million investment for production to begin in November.

While aspiring for the green, they're also having to shell it out. Carson City has experienced rising wages and costs of land and housing, local real estate experts say. Nevada isn't a low-cost competitor any more, Alvey said.

"We're not a cheap place to do business anymore," he said. "Still, with all that, we have interested businesses coming and expanding."

• Contact reporter Becky Bosshart at bbosshart@nevadaappeal.com or 881-1212.