Utah is winning the regional competition with Colorado for manufacturing prominence. Here’s what a new industrial hierarchy means in the West

Four years ago I wrote that in the regional competition between the Rocky Mountain look-alikes to attract manufacturing business and economy, the outcome would likely come down to Utah’s workforce advantage vs. Colorado’s “high-velocity food and beverage business.”

Today, Utah is winning.

By the numbers, Utah is a manufacturing juggernaut. A study by Economic Innovation Group released in October concluded that Utah led the nation in manufacturing job growth between 2019 and 2023, adding over 16,000 jobs — roughly a 12 percent increase.

Moreover, EIG surmised that nationally, “Utah was among the five states that accounted for two-thirds of the sector’s job growth, including Texas, Florida, Georgia and Arizona.” Where Utah once trailed Colorado five years in total manufacturing jobs, today, the Beehive state has surged past its neighbor. In September this year, Bureau of Labor Statistics (BLS) data measured manufacturing employment in Utah at 154,900 jobs — up from 138,000 or so in September of 2019.

In contrast, manufacturing employment in Colorado has stalled. The BLS measures current manufacturing employment at 150,600 jobs — a decrease from a post-pandemic high of 154,000 jobs in August of 2022 and flat from the same month in 2019, if not down a smidge from 150,900. The Colorado Chamber of Commerce also reported this week that the number of manufacturing businesses has declined in the state, from 6,210 to 6,163.

What happened? How did Colorado lose a lead of 12,000 or so manufacturing jobs to its neighbor and competitor?

For starters, Colorado’s nation-leading natural and organic food economy has slowed, especially for the small, highly innovative brands that fueled unprecedented growth through the ‘aughts and 2010’s. As Fresca Foods’ Allie Brimlow conveyed to me in July, “the path for smaller brands to scale, to muscle their way through to national distribution, has become really challenging.”

As a result, manufacturing employment in Colorado’s food sector has leveled off at roughly 26,000 jobs – still the largest manufacturing-jobs industry in the state. But the well-respected Colorado Business Outlook and Forum is forecasting net job losses for the sector when the dust settles in 2024 and modest growth in 2025.

The news is worse for Colorado beverage makers. The state’s transformative craft beer sector is in recession, part of a national correction that’s painful if not predictable. Craft Beer has won its existential battle with Big Beer; it’s now subject to the same market and consumer shifts that buffet most every mature CPG sector. Fortunately, what’s painful today will likely usher in a new growth phase.

Until it does, Utah is assembling all the pieces to win the competition for manufacturing companies and jobs — and benefiting from the foibles of others. California is for Utah the gift that keeps on giving. High-costs and a difficult regulatory environment continue to force manufacturers out of California — and by many accounts, Utah is a top destination along with Texas and Arizona.

All three states share a key attribute: workforce. For manufacturers, none may be more pronounced than Utah.

I wrote in 2020 that, “Utah’s workforce advantage is a beacon for manufacturers. Simply, the state’s developing the next-generation talent manufacturers need — educated, tech-savvy and capable but also shaped positively by Utah’s cohesive community. Utah’s sons and daughters leave, many on Church of Jesus Christ of Latter-day Saints missions, but return often fluent in another language, motivated and exposed to the world, to start careers and families.”

Today, the state has also become a model for how economic developers and federal and local resources collaborate to support manufacturers. The Utah Manufacturers Association, the federally supported Utah Manufacturing Extension Partnership (or MEP), eco-devo groups like iMpact Utah, and state government including the Governor’s office, provide unique, complimentary services in the manufacturing value-chain — with the success of the entire ecosystem in mind. And Utah Governor Spencer Cox is deliberately cultivating a pro-manufacturing brand.

The same formula has been elusive in Colorado — and to be fair — in other states.

But Colorado under Governor Jared Polis tilts decidedly high-tech. Last fall, after his administration backed a quantum computing submission in lieu of advanced manufacturing in the CHIPS ACT-inspired Regional Technology and Innovation Hubs competition, I wrote that “Governor Polis was first a technology executive. His go-to backers, including the TechHubNow! team, are tech investors and advocates. If Midwest and Rustbelt governors view their economic fortunes through a manufacturing-informed lens, the Polis team sees technology.”

Polis’ tech-gambit may pay off. After all, manufacturing is quickly becoming a technology play. But as the state’s F&B sector looks to regain its high-growth mojo, Utah, Texas, and Arizona are becoming advanced manufacturing destinations in key industries like transportation (including aerospace and automotive) and the emerging semiconductor supply chain. Manufacturers are locating there to find workers, deliberate support, and a pro-business climate.

In Utah, they’re also finding success.

Bart Taylor is a Moss Adams BDE and former publisher of CompanyWeek Manufacturing Media. Reach him at bart.taylor@mossadams.com.