Manufacturing ready to rebound along 78 corridor, study finds - The San Diego Union-Tribune

Manufacturing is North County’s largest private sector employer, and the industry appears poised to rebound after setbacks during the past year related to the COVID-19 pandemic, according to a new study conducted by the San Diego Regional Economic Development Council.

The study was commissioned by Innovate 78, a partnership of cities along the State Route 78 corridor, including Oceanside, Carlsbad, Vista, San Marcos and Escondido. The study found that manufacturing in the 78 corridor provides more than 40,000 jobs with an annual economic impact of $18 billion. The results were released in late February.

Roughly one-third of those jobs were in “high-value goods” such as computer and electronics manufacturing, where available jobs are projected to grow by nearly 6 percent over the next five years, the study said.

“That’s where the industry is going to thrive,” said Jordan Latchford, the EDC’s research manager and author of the study, entitled “The Future of Manufacturing in North County.”

The 78 corridor’s manufacturing industry is diverse, with 813 firms “producing everything from craft beer and golf clubs to medical and telecommunications equipment,” the study said.

Overall, North County’s manufacturing base is expected to grow by 2 percent over the next five years, cooling off from the period of 2014-2019, when jobs grew by 15 percent. Along with COVID, such factors as automation and globalization affected the rate of job growth, Latchford said.

The study included a survey of North County manufacturing firms, which found that 43 percent reported revenue declines since the start of the pandemic, and 24 percent reported an increase in revenue. The industry’s jobs grew by 1 percent during the pandemic in 2020, or a net gain of 770 jobs.

Another survey finding: 58 percent of companies said they planned to add physical space in the future, mostly for non-production uses, likely due to physical distancing requirements put in place during the pandemic.

“There is room for these manufacturers to grow in North County,” Latchford said, due to an increase in vacancy rates for industrial space in the region.

One company that performed strongly during the pandemic was Flux Power, a Vista-based firm that makes lithium-ion batteries for commercial and industrial equipment such as forklifts and pallet jacks. The publicly traded company reported record revenue of $6.5 million for the quarter that ended in December, said Chuck Scheiwe, chief financial officer.

One of their major customers, a national beverage company, saw a surge in business during the pandemic which translated into a boost for Flux Power, said Scheiwe.

“We were in the right business at the right time,” he said.

The company did take an initial hit on supplying batteries for luggage handling equipment for an airline customer, but that businesses has started to rebound, Scheiwe said.

The company has 110 employees, 80 to 90 of which work at its Vista assembly facility, said Scheiwe. During the pandemic, Flux Power initiated safety protocols for its employees and did not have any reported COVID infections that occurred at the workplace, he said.

Scheiwe said it appears that North County manufacturers came through the pandemic in reasonably good shape.

“The numbers are stronger than I expected,” he said.

The study also found that nearly 10,000 manufacturing jobs in North County face a higher-than-average risk from automation, demonstrating a “great need” for training and education that can help workers prepare for more resilient and higher paying jobs.

Linda Kurokawa, executive director of MiraCosta College’s Technology Career Institute in Carlsbad, said she and her staff are in close contact with company representatives to make sure the college is preparing students with the right skills for manufacturing jobs.

Industry needs training programs that are flexible, adaptable and accelerated to get people to work quickly. “They can’t wait two years, they need them now,” she said.

TCI’s accelerated programs are preparing students for such jobs as engineering technician, machinist, drone operator and brew master, said Kurokawa. Industry representatives have told her they could grow their companies faster if they had more skilled workers available.

The institute’s students are “transitioning right into jobs,” she said.

Ruishan Chow works to close the “skills gap” for local workers as part of a consortium of community colleges in San Diego and Imperial counties.

The pandemic has fueled a sense of urgency to ensure workers have the necessary skills for tomorrow’s manufacturing jobs.

“We have to understand continuous learning is part of life,” Chow said. “I see this as an opportunity for employees to focus on their personal and professional growth. And for employers to invest in their people by encouraging them to go back to school.”

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