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Manufacturing in Montana will experience modest improvement in 2012, benefiting from improving exports and declining imports.

In a survey conducted by the Bureau of Business and Economic Research at the University of Montana, in 2011, almost half of Montana manufacturers said that they expected improved conditions for 2012. However, 90 percent indicated that they plan to keep their workforce at the current level or hire more. Seven percent said they would reduce the number of employees.

Workers' compensation rates and health insurance costs continue to be identified as the most important issues for manufacturers, followed by cost of energy and availability of qualified workers.

Montana manufacturers were somewhat concerned about having to compete with the developing energy industry for skilled employees. Otherwise they anticipate little impact from energy development, except for the overall improvement it will bring to the economy in general.

During the four years of the recession, Montana's manufacturing sector suffered continual declines in employment. Most of those declines are attributable to the woods product industry.

At the same time, however, a number of sectors have shown growth, including chemicals, petroleum and coal, food and beverages.

Montana manufacturers had sales in 2011 topping $10 billion, employed nearly 20,000 workers and accounted for approximately $1.1 billion in earnings.

The manufacturing sectors account for about 20 percent of Montana's economic base, and throughout the recession, four Montana counties (Yellowstone, Flathead, Gallatin and Missoula) retained more than 2,500 manufacturing employees with total earnings exceeding $125 million.

Although wood, paper and furniture remains the largest manufacturing sector in Montana, by number of employees, earnings are highest in the chemicals, petroleum and coal sectors, which has seen growth in employment while wood products has been declining.