business backgrounder | industry
2012 manufacturing report: key to staying competitive By Kelly Kearsley
While manufacturers tout the need for
skilled workers as one of their top concerns,
it’s not the only challenge facing the
industry, according to AWB’s 2012 Manufacturing Report. Representatives from
AWB heard from 70 manufacturers in visits
to six cities across the state last year.
“If there’s one thing this tour underscored
is the value of this industry to Washington
state,” said Amy Johnson, strategic consultant to the AWB Institute.
“We have a tremendous opportunity here to attract and retain some
of the brightest talent in the industry, but as our members pointed
out time and again, we must retain our competitiveness.”
The report outlined what manufacturing employers see as key threats
to that competitiveness:
• Power rate problems: Manufacturers interviewed by AWB say
changes are needed to Initiative 937 in order for manufacturers
to keep power rates from rising and help local companies remain
competitive with other states. Passed by voters in 2006, I-937
required utilities to buy 15 percent of their electricity from renewable sources by 2020. But the purchase area is limited and the
initiative excludes hydropower, which produces 70 percent of our
state’s electricity. Manufacturers would like to modify the definition of renewable energy, and extend a credit on power generated
in this state that’s set to expire.
• Losing tax incentives: The state provides several manufacturing tax incentives to help existing manufacturers expand their
business and to attract new companies. But some are at risk of
expiring, including a B&O tax exemption aimed at keeping the
state’s food processors competitive with manufacturers in neighboring states.
• Regulatory environment: While the manufacturers AWB spoke
with understand the need for regulation, they say that the current
regulatory environment makes it difficult to expand and may be
a deterrent for some businesses wanting to locate here. In many
cases, the state regulations exceed the federal requirements and
the process for permitting and expanding business can be incredibly slow.
To read the whole report, visit www.awbinstitute.org.
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