Montana manufacturing outpaces most other sectors, generating $2 billion in wages

BOZEMAN - Montana's manufacturing sector remains a cornerstone of the state's economy, according to three reports on the state of manufacturing recently released by the Montana Manufacturing Extension Center at Montana State University and authored by the Bureau of Business and Economic Research at the University of Montana. The manufacturing sector generated more than $2 billion in base labor earnings in 2024, ranking second behind hospitality.

"Manufacturing continues to be a strong and resilient sector of the Montana economy," said Paddy Fleming, MMEC director. "Despite recent economic uncertainties, our manufacturers continue to innovate, invest in expansions and automation, and keep upbeat about the future."

The reports, released last month, also pointed to a contraction within the manufacturing sector.

"Manufacturing has expanded faster than the nation since 2020, driven by growth in durable goods, but the sector began to cool in late 2024 and early 2025 with declines in wood products and food production," concluded the executive summary of the Manufacturing in Montana and the State of the Economy. "Establishment growth over the past decade highlights entrepreneurship and diversification, though recent closures mark the first broad contraction in years. Exports rebounded strongly in 2024, led by petroleum and transportation equipment, while workforce shortages and rising input costs continue to challenge manufacturers."

The contraction, Fleming said, was to be expected.

"Given the impressive expansion of the number of manufacturers in Montana since 2017, which exceeded the national growth numbers, it is only expected that we would see a slight slowdown in that expansion rate," Fleming said. "Montana's manufacturing took a hit with the lumber product shutdowns at Seely Lake, Missoula and Bonner. But there is significant expansion planning going on with our existing manufacturers, and there remains strong interest in out-of-state and out-of-country manufacturers relocating to Montana."

The MMEC is housed in MSU's Norm Asbjornson College of Engineering. For nearly 30 years, MMEC has provided services to manufacturing companies across the state to help improve business operations through in-person assistance by industry specialists. MMEC also facilitates collaborations between industry and MSU through student internships and capstone projects, as well as connecting businesses to university labs, research centers and faculty expertise.

The reports, which largely comprise data from 2024, also illuminated several other trends:

• Real gross domestic product from Montana manufacturers reached $3 billion.
• Montana manufacturing GDP has grown 7% faster than the national average since early 2020.
• Montana exports grew strongly in 2024, increasing by 10%.
• In the second report, the Montana Manufacturing Survey, Montana manufacturers reported a cooling in business activity in 2024, as well as reduced rates of capital investment and widespread labor shortages. Nonetheless, most said they expect modest growth in 2025.

A third report explores the work of MMEC itself and how its services assist manufacturers and contribute to the industry at large. According to the Evaluation and Impacts of the Montana Manufacturing Extension Center, the MMEC helped to create or retain 642 jobs, almost $61 million in revenue, over $39 million in new investments, and $22.8 million in cost savings for manufacturers in 2024.

"MMEC's services provide a four-to-one return on investment to the state government, based on a calculation of how much income tax collections increase as a result of these services," the report stated.

The MMEC is a statewide manufacturing outreach center providing resources and extensive expertise in manufacturing and business in a variety of industries. The center helps Montana manufacturers to assess and improve their operations, providing trainings and workforce development, and leverages research and technological developments at MSU to keep manufacturing competitive. More information is available on the MMEC website.