Manufacturing in Nebraska has experienced record growth over the past two years, but the market is still struggling with supply chain and workforce problems.
“Manufacturing in Nebraska is responsible for 1 out of 10 nonagricultural jobs, so the strength of manufacturing is really important for our state in terms of the economic resilience during the past couple of years and the economic growth of our state,” said Bryan Slone, president of the Nebraska Chamber of Commerce & Industry. We’ve really led with manufacturing, and we’re really fortunate to have a strong manufacturing base in Omaha and in Nebraska right now.”
Bouncing Back
“When COVID hit in March [last year], retailers weren’t sure what it meant for them, so we had a large drop-off in sales,” said Tammy Carlson, vice president of human resources at Lozier. “We saw a sharp ‘V’ recovery that drove our business right back up very quickly. I think retailers just needed a minute or two to adjust to COVID and figure out what to do.”
Manufacturing is growing faster than most industries, both in Nebraska and nationally.
“From a market standpoint, manufacturing is doing really well,” Slone said. “Last year was a high growth year for manufacturing, and I would say that this year is about the same. We’ve had two really high growth years in a row.”
Although manufacturers are busy, much of the workforce is either not familiar with manufacturing or doesn’t see it as a viable career path.
“I don’t know of any area of manufacturing that isn’t very busy right now,” Carlson said.
Manufacturing faces two serious issues: 1) the supply chain, the ability to produce the products and meet all of the demand for orders, and 2) a too-small workforce. But despite these challenges manufacturing is growing in Omaha and in Nebraska.
There is a much greater demand for U.S. goods and services now that COVID-19 issues are winding down, and Nebraska certainly is seeing some of that demand.
“For Nebraska, a lot of our manufacturing is in the area of ag manufacturing or construction equipment, biotech, and pharmaceutical type stuff,” Slone said. “Those are all growing areas of the economy as well. I think our manufacturing base in Nebraska is particularly focused on a lot of high-growth sectors.”
Supply Chain
All manufacturers across the state are still experiencing supply chain problems. It all started with steel. At the beginning of the pandemic it became increasingly difficult to get steel because foreign steel manufacturers were either shutting down or were unable to make shipments due to COVID-19 restrictions in their countries.
“Supply chain problems vary day by day, hour by hour, and minute by minute — literally,” Carlson said. “One day it could be a particular input product like board, and another day it could be something that impacts the paint supply. Our venders are struggling with the same thing, so they start limiting what they will provide to everyone.”
Shipments to the Heartland remain challenging.
“I would say that the current supply chain problems really relate to, No. 1, it’s very hard to get shipments from overseas through U.S. ports to Nebraska on time and secondly, the workforce shortage is really creating challenges for our transportation industry,” Slone said.
High Demand
The outlook over the next year is bright because of the high demand for product. Many manufacturers already have orders that will take them through 2022.
“Demand is very strong, but the real challenge for manufacturers is finding a skilled workforce and navigating the supply chain,” Slone said. “I don’t think the international supply chain issues will totally resolve themselves in 2021. I think we’ll still be having some of those international supply chain issues in 2022.”
