Advanced manufacturing has been a target industry for regional economic development leaders as a means to buoy Northern Nevada’s economy when the next recession hits.
It’s among the fastest-growing industries in Greater Reno-Sparks, and in October, total manufacturing employment in the Reno-Sparks metropolitan statistical area surpassed total manufacturing employment in Las Vegas for the first time.
This is noteworthy, considering the Las Vegas MSA is about four times larger than Reno-Sparks with more than 1,040,000 jobs compared to 263,000.
Manufacturing employment topped 27,400 in October, the state’s Department of Employment, Training and Rehabilitation reports, compared to 26,100 in Las Vegas. Manufacturing accounted for 6.6 percent of all jobs in Reno-Sparks in 2018, says David Schmidt, chief economist for DETR’s research and analysis bureau.
Schmidt has lived in Northern Nevada his entire life. He witnessed the impacts of tribal gaming on Northern Nevada’s largely gaming-centric economy in the 1990s and how the downtown area reinvented itself during the ensuing shift to a more leisure- and recreation-focused destination.
And again more recently, as Northern Nevada reinvented itself as a technology, entrepreneurial and white collar professional hub.
“It’s exciting to see what’s going on in Northern Nevada. It’s definitely been an interesting shift,” Schmidt says. “We continue to see shifts in who we are and what we offer … and we are growing in ways that we didn’t grow in the past.
“There’s definitely been a lot of growth in (the manufacturing) sector in Reno, and it shows in the total number of jobs we have.”
Nowhere are the region’s changing job base more evident than in DETR’s recent job growth data. The four main buckets of employment growth in the Reno-Sparks MSA include:
Professional and business services
Professional and business services saw the most growth year-over-year in October (the last month data was available at the time of this writing).
The industry includes a wide range of business support professions, including legal, accounting, architectural and engineering services, computer systems design, management and consulting, scientific research, advertising and public relations. The category added 4,000 jobs from October of 2018 to 2019.
Manufacturing, construction and retail, meanwhile, added roughly 2,000 jobs each during the same period. That’s approximately 10,000 jobs of the roughly 12,000 jobs added in that timeframe, Schmidt says.
The growth in construction employment represents an 11 percent spike year-over-year, which can be looked at with some trepidation since the collapse of the construction industry led to so much financial difficulty during the last recession.
However, Schmidt notes, construction as a share of total jobs in the Reno-Sparks MSA is actually lower today (7.8 percent) than back in 2005 and 2006 (approximately 11 percent). In 2003, before the last big building boom, construction employment was around 8.6 percent, Schmidt says.
It’s no secret that it’s become more difficult to live in Northern Nevada due in large part to escalating home prices.
However, wages, for the most part, are on the rise for many of the new jobs being created in the Truckee Meadows, according to DETR. The 10 largest projected growth occupations from 2018 to 2020 include:
General freight laborers
Sales reps for wholesale and manufacturing
Supervisors and production workers
Metal fabricators and fitters
General and operations managers
Mechanical engineers and drafters
Market research analysts
Many of these positions pay more than $20 an hour, Schmidt notes, while some pay more than $30 an hour. Within the top 20 high-growth occupations, only three (retail sales clerks, janitors and fast-food workers) pay less than $10 an hour, he says.
“A lot of occupations where we are projected to have the most jobs are paying pretty decent wages as well,” he says.
Mike Kazmierski, president and chief executive officer of the Economic Development Authority of Western Nevada, says 2019 was a strong year for job quality, as well as job growth. Many of the new positions being created across the region — particularly in the entrepreneurial startup community — dovetail with the needs of next-generation employers.
What’s more, the majority of companies EDAWN worked with in 2018 paid average wages north of $70,000 a year, he says. In 2016, that average was just $36,000.
EDAWN has aggressively targeted corporate headquarters. In the past fiscal year, a record of 18 corporate headquarters relocated to Northern Nevada. The previously high was 15, and five years ago that number was just three or four, Kazmierski says.
“We’ve upgraded the kinds of kinds of jobs and companies that are coming to our region,” he says. “Three years ago, job creation was centered on logistics, distribution and ecommerce, with wages in the $15 range. While there’s value in those manufacturing jobs, many will become obsolete in the next decade.”
The shift to a tech-centric economy bodes well for the north state’s future, Kazmierski adds. Technology is another major initiative for EDAWN in order to attract the kinds of companies here that will dominate the employment landscape over the next few decades.
“Fifty percent of the jobs that exist now will be gone in 2030, replaced by technology, automation, robotics and AI,” he says. “The transition doesn’t mean 50 percent of people will be out of work; it means 50 percent of people in jobs now will need to be retrained and retooled to do the jobs of the future.”