Manufacturing Growth

Photo by Gat Creek.

West Virginia manufacturers are a driving force in the state’s economy. According to the National Association of Manufacturers, West Virginia supported $3.54 billion in manufactured goods in 2019 and $1.67 billion in exports for free trade agreement partners. Together, those pre-pandemic numbers created jobs and supported growing businesses in the Mountain State. Now, two years into the COVID-19 pandemic, manufacturers talk about growth in the industry and the challenges and ongoing concerns of workforce meeting supply and demand.

Gat Creek, a furniture maker in Morgan County, employed 150 people at its 100,000-square-foot facility in 2019.

“The furniture industry was experiencing a modest recovery prior to the pandemic—housing starts were rising, and millennials were finally starting to form families and buy furniture,” says CEO Gat Caperton. “Everything changed with the pandemic. We moved from growing 10% a year to growing over 30% per year. This is a lot for a manufacturing company.”

With people spending more time at home, homeowners started looking closely at their living spaces, which, for many, included buying new furniture and home goods.

“We had no idea forcing people to stay in their homes for two years would drive so much business,” he says. “Like most businesses, we idled production at the end of the first quarter in 2020. People kept buying furniture, mostly using online channels, and our backlog grew fast and grew large. In the fourth quarter of 2020, we announced our plan to expand our factory by 40,000 square feet and double our production capacity.”

Furniture isn’t the only manufacturing sector experiencing growth in West Virginia. Steven Weiss, Allegany Ballistics Laboratory (ABL) site lead and director of the tactical propulsion and ordnance operating unit at Northrop Grunman, says ABL’s workforce has grown by 14% between 2020 and 2022. The company designs, develops and manufactures tactical rocket motors, medium caliber ammunition, components and end times and fuze and electronics equipment. ABL—which employs approximately 1,600 doctors, scientists, engineers, technicians and hourly workers—is expecting more growth in the coming years.

“We continually invest in new facilities, equipment and training to bring top-notch offerings to our customers,” says Weiss. “We have embraced a new normal. We offer flexible schedules when possible and are happy to see our employees back.”

Weiss also says his company learned how to be agile, adopt virtual practices when possible and roll out safety practices to keep on-site employees safe during working hours.

However, growth in any industry brings challenges, and one of those is finding a skilled workforce to help meet the demand for these products.

“Again, the pandemic mostly accelerated changes that were already happening in our industry and marketplace. This includes a shortage of workers. After the pandemic, we moved from simply collecting employment applications at our front door to actively recruiting potential employees,” says Caperton. “For the first 25 years of our business, the furniture supply easily exceeded the demand. This was due to shrinking demand and expanding supply. We now operate in an industry where demand easily outstrips supply. Our production lead times have moved from six weeks to six months. The factory is sold out through August. We are now in a race against inflation. We need to get furniture to customers fast—not just for service but to keep our production costs below our sale prices.”

Rebecca McPhail, the West Virginia Manufacturers Association (WVMA) president, says many West Virginia manufacturers are running at capacity and seeing challenges with workforce and supply chain issues. However, the outlook for the state’s manufacturing industry is positive and reveals new opportunities.

“In many ways, supply chain shortages that manufacturers and end consumers experienced during the pandemic create a compelling argument for increased domestic manufacturing. With an abundance of natural resources and the prospect of downstream natural gas development for use in chemical manufacturing, West Virginia is well positioned to see more investment in manufacturing operations,” says McPhail.

To help bring in these investments, McPhail would like to see the West Virginia Legislature remove some hurdles, including the taxing of investment in new technologies and environmental controls as personal property.

“Being one of only a few states that impose this tax on manufacturers without broad exemption is a competitive disadvantage for West Virginia,” she says.

According to McPhail, despite many challenges, state leaders have worked over the past few years to remove barriers to manufacturing growth and investment and have done a wonderful job highlighting the benefits of investing in our state.

“There is still more work to be done, but the needle is moving,” she says. “Newly announced investment by NuCor Corporation and GreenPower has set the stage for even more growth. The Legislature is motivated to create good jobs for West Virginians, and manufacturers can provide those jobs and more. Manufacturers are community partners who invest not only in plant operations but also in the communities that surround their facilities. More manufacturing means better jobs and stronger communities.”

Like the industry, the WVMA is also in growth mode, according to McPhail.

“We are adding new members and programming regularly,” she says. “We spend our time cultivating a network of manufacturers in West Virginia that can share best practices, help meet supply chain demands and represent a strong voice when it comes to policy advocacy and mobilization. We believe manufacturing can be the foundation of our state economy and are proud to represent the companies that are creating great jobs, quality products and helping West Virginia gain prominence as a wonderful place to live, work and raise a family.”

McPhail is proud of the industry and how it handled the pandemic.

“I’ve said it many times during the pandemic, but manufacturers are leaders in health and safety. Industry leaders and front-line manufacturing professionals worked tirelessly during COVID-19 to continue to make the items consumers need while maintaining high safety standards in their plants,” she says. “They did this by being nimble in the deployment of increased safety measures, encouraging safe and healthy practices and working proactively to provide testing and vaccinations to employees.”