N.H. manufacturers thrive by finding their niche

We live in a smaller world in which the pace of business moves faster than ever. The global impact of the economy now reaches us at all levels, no matter whether companies are doing business internationally, across the United States, within New England, inside New Hampshire or right down the street.

Globalization is transforming our economy, our businesses and the choices we make as individual consumers. Today’s world is interconnected like never before – and international businesses are playing a more significant role in our everyday lives – and in our own companies.

Within New Hampshire, globalization’s impact on the economy involves the manufacturing sector.

Over the past 35 years, manufacturing has been declining as a percentage of gross world product and, to no one’s surprise, gross domestic product. In 1969 manufacturing accounted for 30 percent of all goods and services produced globally; in 2006, it was approximately 18 percent. Over the same horizon, U.S. manufacturing also contracted, as low-cost production of commodity-type goods moved overseas to cheaper labor markets.

According to the Bureau of Economic Analysis, manufacturing represented 25 percent of U.S. gross domestic product in 1969 but dropped to 12 percent in 2006, more than a 50 percent decline.

Let’s consider the state of manufacturing in New Hampshire today. It accounts for 12 percent of the state’s economy, compared to 10 percent of the region’s economy. This means 20 percent more manufacturing activity takes place in New Hampshire than in New England as a whole. During 2005 – the last year for which statistics are available – manufacturing grew 7.2 percent in New Hampshire, close to double the national average of 4 percent growth.

While the sector has declined overall in recent years, New Hampshire’s expertise in high-end, niche manufacturing continues to attract global businesses and international interest.

Although commodity-type manufacturers have suffered under the lower cost structure of global competition, some New Hampshire manufacturers are not only surviving but also thriving. One such company is Pittsfield Weaving Company in Pittsfield. The company manufactures woven labels and other branding products for the apparel and soft-goods industries around the world. Its patented woven labels combine technology that solves two major issues facing the clothing industry: losses due to outright theft and those due to counterfeit-branded goods.

The company uses a patented process in a pilot program to integrate Radio Frequency Identification Device tags into labels for commercial and retail applications. Reversing the global trend, this New Hampshire company ships as much as 40 percent of its products to customers in Mexico, Central America, Europe and Asia.

New Hampshire’s niche manufacturers are located throughout the state and employ a number of skilled workers in an eclectic mix of businesses. The state’s southern tier is home to companies that manufacture turnkey solutions in the photovoltaic industry, patented filter systems and solutions for industrial buildings, and engineer and service high-efficiency mixing systems used in the food, beverage, pharmaceutical and biotech industries, to mention just a few. These companies operate locally but have sales and offices that span the globe, including Beijing and Shanghai, China.

Global outlook, local actions

Manufacturing continues to have a strong impact on our local economy. In addition to the niche companies mentioned above, several internationally based manufacturers and producers rank among the state’s largest employers. They run the gamut from defense and municipal contractors to manufacturers and food producers. They include: BAE Systems (England); New Hampshire Ball Bearings (Japan); OSRAM Sylvania (Germany); Pike Industries (Ireland); Lindt and Sprungli (Switzerland); and Stonyfield Farm (France).

Globalization also benefits our local economy by reducing the cost of products, making many goods more affordable for the average consumer.

While China and India are often mentioned as usurpers of American jobs, China’s low-cost manufacturing capacity has benefited the average U.S. consumer by lowering the cost of thousands of household goods, such as apparel, appliances and electronic devices. Lower prices mean we all have more consumer choices.

As New Hampshire businesses continue to experience the benefits of globalization, our state can work to capitalize on future international opportunities. Our lives and jobs will continue to be impacted by our local actions – and our global outlook.

Maureen Kelliher is senior vice president and chief investment officer, investment management services, at Citizens Bank New Hampshire.