ICR’s Manufacturing Might and New Incentives to Help Smaller Manufacturers Modernize
The Cedar Rapids area historically has had a strong manufacturing history. Now the State of Iowa is offering incentives to some smaller manufacturers so they can modernize more efficiently and maintain their manufacturing dominance. Here’s a look at the manufacturing might of the Cedar Rapids region:
- According to the Bureau of Economic Analysis, Cedar Rapids leads the state in manufacturing jobs.
- Jobs in the manufacturing sector have the highest positive ripple effect in a community, according to Ron Corbett with the Cedar Rapids Metro Economic Alliance. In other words, jobs in manufacturing create many other businesses, which lead to additional jobs. “Historically it (manufacturing) has been important because of the multiplier effect on the area’s economy. In our region, we see that multiplier effect manifesting in shipping like CRST, Hummer Trucking, Westside and others. We also see it in warehousing with Worley, GSTC, Travero Logistics and others.” It is also manifested in the construction service industry, mechanical contractors, piping contractors, electrical contractors and supplier networks.
- According to the Manufacturing Institute, every dollar of manufactured goods creates another $1.34 of value elsewhere in the economy.
- Jobs in manufacturing companies tend to pay higher wages and offer better benefits thanks to the State of Iowa offering wage incentive programs to boost hourly manufacturing job wages.
Corbett says from an economic standpoint, we’re better off because Cedar Rapids has historically focused on manufacturing and maintaining those jobs. “It’s the bedrock of our region’s strength and it’s easier to build off your strengths than to go into a new sector. We currently have 12-13 RFP’s (requests for proposals) all related to manufacturing.”
What does the future hold for this critical component of our area economy? This is now being explored with the state’s strategy called Manufacturing 4.0. The plan is to encourage manufacturers to innovate, embrace tech, and modernize processes.
As part of this strategy, this year Iowa lawmakers passed accelerated depreciation for some manufacturers. Accelerated depreciated allows companies to more quickly depreciate equipment on Iowa tax returns than they could in the past. In 2021, some companies can claim up to 100% depreciation. (As always, check with your tax preparer about the best option for your company.)
The state is also offering a grant of up to $75,000 that smaller manufacturers (less than 75 employees) can apply for. These monies can be used to help offset some of the cost of modernization. The state has partnered with CIRAS (Center for Industrial Research and Service) to work with manufacturers on how to modernize. “The state is trying to be a supportive partner of the manufacturing sector and these first two steps of helping the small manufacturers are part of a long-term program to make sure manufacturing continues to be a viable sector of our economy,” says Corbett.
At the Economic Alliance, we’re reaching out to manufacturers to inform them of this initiative, support them in any applications they have for the grant program and encourage them to work with CIRAS to do a review of their business.