Manufacturing sector rebound likely isn’t near

Nevada lost 10,000 manufacturing jobs in the recession and has regained just 1,000, and it has dim prospects for a return to the peak soon, an industry spokesman said Tuesday.

Ray Bacon, executive director of the Nevada Manufacturing Association, said peak manufacturing industry employment in the Silver State was 48,000 around 2005, but it dropped more than 20 percent.

“That’s the second-largest job loss (record) in the state by sector,” he said during an appearance at a Nevada Business Connections breakfast meeting. He noted the top job-loss sector was the construction industry.

The manufacturing industry decrease was in large measure due to losses in building construction materials manufacturing, Bacon said, but he didn’t know the precise job-loss impact in that area. His analysis, however, appeared sound given that construction and building materials go hand in hand. He said he didn’t expect a quick snap-back.

The recent revival of 1,000 jobs in Silver State manufacturing employment means just 10 percent of the sector’s total recession losses have been recouped. It also means the blip upward to 39,000 Bacon spoke of amounts to a 2.6 percent hike from the recent nadir.

Bacon was one of three panelists at the breakfast, a gathering at the Gold Dust West Hotel and Casino attracting businesspeople from across Northern Nevada. The NBC organization is a private-sector economic-development group that promotes marketing and business; it is Carson City-based.

Other panel members were Harvey Hornung, general manager at Nevada Heat Treating in Mound House, and Olgierd Downarowicz, president of Polam Precision Machining of Carson City. The moderator was Chris MacKenzie of the law firm Allison, MacKenzie, Pavlakis, Wright & Fagan, Ltd.

Downarowicz said his machining firm survived the past dozen years by servicing the medical field with precision parts, and at least 90 percent of his customers are outside Nevada. Yet he expressed happiness he came to Carson City from California’s Bay Area in 2000.

“This was my best decision ever,” he said.

Hornung said his firm, which heat-treats metals to make them harder or softer, has 150 customers and is on track for “our biggest year ever” despite challenges. He said he thinks the federal government’s budget sequester has some customers putting things off, and the soon-to-take-effect Obamacare could bring additional health-related costs.

Bacon added another imminent challenge to those Hornung mentioned.

The manufacturing industry’s lobbyist said NV Energy power costs are likely to rise now that the company is in the stable of Berkshire Hathaway, the conglomerate run by billionaire Warren Buffett. Bacon said history shows utilities in Buffett’s stable tend to hike rates 16 percent to 24 percent over time.

“You’ve got about a two-year window to get better,” Bacon said, urging manufacturers in the audience to make their operations more energy-efficient.