Building on their success
Several area CEOs expect their Inland Northwest manufacturing companies this year to exceed their 2005 production levels. They say the region’s ongoing building boom, along with reconstruction and rebuilding in the hurricane-ravaged South, will help fuel much of the production.
Spokane’s largest manufacturing employer, custom cabinet maker Huntwood Industries Inc., anticipates significant growth and profit increases this year — despite some warnings that home construction could cool.
“Some large national builders may be affected or may not be as aggressive,” said Tim Hunt, Huntwood’s chief executive officer. “We don’t think it will affect our market. Our orders are always sold three to four weeks in advance. We go by demand and don’t have a backlog of warehoused products.”
Hunt expects his company — which produces about 1,100 cabinets a day — to be fully functional in its new 490,000-square-foot Liberty Lake industrial plant by early 2006.
“We plan to quadruple our production. Everything looks great, and we plan to grow by another 20 to 25 percent this year,” said Hunt, whose company’s work force will grow by 164 employees this year, bringing total employment to 805.
But economists pepper their forecasts with caution.
Jeff Zahir, regional labor economist for the Washington Employment Security Department, cites a “constellation of influences, from interest rate increases to rising prices for gas and heating oil to a cooling down of the housing market,” all of which could dampen the outlook for manufacturers, he said.
He anticipates a softer year for manufacturers. “We certainly won’t see an increase of 200 manufacturing jobs like we saw in Spokane County last year,” he said.
In Kootenai County, nearly one-fourth of manufacturers turn out lumber, wood furniture and other wood products.
Timber profits have suffered from recent drastic cuts to U.S. duties on imported Canadian softwood lumber, said Kathryn Tacke, the Idaho Department of Commerce & Labor analyst for North Idaho.
“I’m very nervous about the change in the tariff,” Tacke said. “It could result in reduced prices for U.S. lumber and might also mean reduced markets.
“The wild card is hurricane rebuilding,” she added.
Indeed, the Gulf Coast’s needs are already boosting bottom lines for several Inland Northwest companies.
“There’s been an influx of Hurricane Katrina rebuilds that started in December that I think will carry over into the first quarter of 2006,” said Wayne Williams, president and CEO of Telect, Inc., which develops, manufactures and services telecommunications equipment.
Telect is filling orders for products that will help reconnect computers and phones throughout the South, Williams said.
“Our business growth this year and next on one product we manufacture should be between 15 and 20 percent,” he said.
Meanwhile, higher commodity prices are spurring sales of Itron Inc.’s radio-controlled meter-reading equipment, said LeRoy Nosbaum, chairman and CEO of the Spokane Valley company.
“With utility companies facing higher natural gas costs, there’s lots of pressure for them to be as efficient as they can. They can reduce operations costs with our products and software,” Nosbaum said.
“We like the climate for 2006. Utilities’ capital budgets were pretty good in 2005, and I think they’ll be even better this year.”
Irv Zakheim, CEO of Zak Designs Inc., is banking on the buzz generated by the upcoming films “Cars, “Ice Age II” and a new take on Superman to boost sales of the company’s licensed children’s dinnerware.
“With three pretty good events coming out, we expect to have a pretty good year and expect our sales to go up anywhere from 5 to 15 percent,” Zakheim said.
And Seattle-based Boeing Co.’s success should translate to a good year for Inland Northwest’s aviation-parts manufacturers. At least two of those companies say they’re gearing up to help Boeing meet the demand.