According to new data released this week by MNI, compiler and publisher of the industrial information that powers IndustryNet, North Dakota lost jobs in its industrial sector, as the state’s oil/gas industry continues to shrink. MNI reports the state lost 320 manufacturing jobs from May 2016 to May 2017, a loss of 1%.
This is the second straight year MNI recorded an employment decline in North Dakota’s industrial sector. Losses seem to have slowed, however, with MNI’s 2015-2016 survey showing a much sharper 6% decline in employment, suggesting the worst of the state’s losses may be over.
After the oil bust, is North Dakota once again poised for growth?
North Dakota was the star of the nation’s post-recession recovery period. Between May of 2011 and May 2015, North Dakota added a staggering 10,371 jobs, representing a 28% surge in the state’s industrial workforce. This was largely based on the Bakken Shale boom, which boosted North Dakota’s oil and gas extraction sector exponentially.
Back in May of 2010, North Dakota’s oil/gas sector was a marginal state industry of 2,500 workers, according to MNI’s archived data, but by May of 2015, this number had swelled to 9,030 workers, a 361% increase.
That sector rose to become the state’s top industry by number of employees, overtaking traditional industries like food processing and industrial machinery. In 2012, North Dakota became the nation’s second-largest oil producing state.
Auxiliary sectors like fabricated metals, chemicals and industrial machinery and petroleum products also saw significant employment increases.
In Williston, the heart of the shale boom, the population skyrocketed which lead to a housing shortage and overcrowded schools.
By 2014, Williston had the highest rent in the nation and companies like Falcon Structures began producing oilfield housing made from shipping containers. MNI’s city data shows Williston’s industrial employment nearly tripled in the years between 2010 and 2015.
All that changed when the oil glut caused a plunge in prices and oil companies idled their operations.
The 2015-2016 survey period marked the first time MNI reported a decline in the state’s industrial employment since the recession. Their data shows a 23% drop in oil & gas jobs over the 2015-2016 survey, but a lesser 8.5% decline in oil/gas jobs was recorded over the past twelve months.
Despite these losses, MNI reports North Dakota has more industrial jobs than it did ten years ago – a milestone few states in the nation have achieved. The oil/gas extraction sector still employs 15% of the state’s industrial workforce, and recent data suggests there may be hope for a turnaround with a rise in oil prices and drop in inventories leading some companies to restart production in the Williston area.
Agribusiness, food processing offsets oil decline
One important takeaway from MNI’s report is continued strength in the state’s food processing sector. Jobs in food processing rose a solid 3.8% over the year – notable because food products manufacturing is the state’s third-largest sector by number of jobs.
MNI said most of the major announcements in the state over the year came from that industry, with a soybean processing facility planned for Spiritwood; North Central Grain Co-op’s new dry fertilizer plant in Rolla; and even a burrito making facility, which Red’s All Natural will open in North Sioux City.
Industrial machinery, now the state’s largest sector by industrial employment, also posted a gain, up one percent.
Looking ahead
While North Dakota certainly has had its share of challenges, between the recession and the oil industry decline, many manufacturers in the oil/gas sector and beyond remain positive about the future.
COO Paul Eidenschink of Steffes Corp., a Dickinson metal fabrication company that services a variety of industries, including the oil sector, commented on the abundance of opportunities for North Dakota manufacturers in a recent Grand Forks Herald article.
Steffes, which suffered during the oil bust, has now returned employment at its facility to 2014 levels, and plans to hire additional workers this year.
Quality site selection factors boost optimism
North Dakota’s industrial sector benefits from the state’s business-friendly setting, boasting the second-lowest corporate income taxes in the nation and a favorable regulatory environment.
The state also offers some top-notch programs like its Manufacturing Centers of Excellence programs, which has helped nurture innovation through partnerships with universities, and the North Dakota Trade Office, which has gone a long way to boost the state’s exports in the face of increased global competition (According to the NDTO, North Dakota lead the nation in export growth back in 2007).
By the numbers
North Dakota’s 1,170 industrial companies employ 44,372 workers. Employment losses were sharpest in the state’s Northwest region, which fell by 4.7% to 8,921 jobs. The Northeast and Southeast regions also saw declines, down 2.3% and 1%, respectively. The state’s Southeast quadrant, however, actually posted a gain, up 1.3%.
Fargo added jobs, up 1%, while Williston industrial employment declined 6%. Jobs remained steady in Grand Forks and West Fargo, says MNI.
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North Dakota’s top five industries based on number of jobs:
1. Industrial Machinery Equipment: 8,973 jobs
2. Oil/Gas Extraction: 6,560 jobs
3. Food Processing: 5,460 jobs
4. Fabricated Metals: 3,339 jobs
5. Electronics: 2,359 jobs
North Dakota’s top five cities for number of manufacturing jobs:
1. Fargo: 10,576 jobs
2. Williston: 5,081 jobs
3. Grand Forks: 3,057 jobs
4. Dickinson 2,976 jobs
5. West Fargo: 2.646 jobs
Here are some of the state’s top companies, ranked by number of jobs:
1. Microsoft Corp. (Fargo) - 1,700 employees
2. Doosan Infracore Construction Equipment (Gwinner) - 1,600 employees
3. Halliburton Energy Services, Inc. (Williston) - 1,000 employees
4. CNH Industrial America, LLC (Fargo) – 800 employees
5. Dakota Gasification Co. (Beulah) – 700 employees
For more information on North Dakota manufacturers
MNI’s extensive manufacturing data powers IndustryNet, an industrial marketplace that connects buyers with suppliers. IndustryNet allows users to search and source more than ten thousand types of products, parts, supplies, and services for free. IndustryNet® lists every U.S. manufacturer plus thousands of wholesalers & distributors and industrial service providers. To connect with industrial suppliers in North Dakota and across the U.S. start your free search on IndustryNet. Or, to access detailed profiles of North Dakota’s 1,170 manufacturers and their 4,000 executives, learn more about MNI’s EZSelect database subscription.
