Northeast Kingdom economic report

Vermont Business Magazine, Aug 01, 1998

Vermont's Northeast Kingdom continues to have the highest unemployment rate in the state, but everywhere you turn there is a growing air of optimism. Announcements of business expansions are common and some employers say their major challenge now is finding enough qualified workers. Planners hope to address that problem with new initiatives for "School to Work" and "Welfare to Work."

Essex, Orleans and Caledonia counties spread across almost 2,000 square miles, bordering both New Hampshire to the east and Quebec to the north. Although often described as "off the beaten track," tourism has for years been an important part of this region's economy. Happily the region has so far managed to retain the essence that draws tourists seeking a respite from the metropolitan stress. The Kingdom is still secluded and unspoiled by "urban sprawl;" moose are still more common than condos, and people still know and care about their neighbors. But in recent years, an increasingly diverse manufacturing base has been growing in importance, and has improving the livelihood of residents.

According to the Vermont Department of Employment and Training, total manufacturing jobs in the St Johnsbury and Newport reporting areas grew by about 6 percent through the last quarter of 1997 compared to the previous year. Manufacturing now accounts for about 20 percent of the total employment in the Northeast Kingdom. And if recent announcements of business expansion and growth are any indication, that healthy job growth can be expected to continue.

"Activity has picked up," said Charles Carter, executive director of the Northeastern Vermont Development Association.

"There is a lot of interest by Canadian businesses," said Mary Paull, who works with the association in its Newport office. The growing Canadian interest is driven not only by continued concerns about the separatist movement, but also by the growing success of a number of Canadian companies in the US market.

The natural resources of this region, particularly is vast timberlands, are the basis for many of the manufacturing businesses that make their home in the Kingdom. The largest of those is Ethan Allen Furniture, where total employment at its various locations has held steady at about 1,400. A major investment in modernizing its Beecher Falls plant a couple of years ago appeared to signal the company's commitment to a continued strong presence here, Carter said. He said he has recently noticed the company has been advertising for new employees in local help-wanted listings.

Another major forestry-related employer, Columbia Forest Products in Newport, has added about 45 new jobs in the past year, Carter said. A manufacturer of hardwood veneer, it is owned by Columbia Forest Products of Portland, OR.

These larger companies have contributed to the growth of a number of smaller associated companies, including lumber mills and logging operations, as, well as those associated with furniture making. One of the newer ones is Green Mountain Custom Finishing, a business established about a year ago to provide service to area furniture makers. It already has increased to about 15 employees and has "a lot of expansion potential," Carter said.

Newport Furniture Parts Corp (operating under the name Newport Rocking Chair Company) has nearly 90 employees. Its primary business is fabricating furniture parts and glider rockers. Lyndon Woodworking Inc employs about 65 full time people producing fine wood furniture. There are also dozens of smaller companies occupying special niches, from fine hand-crafted wood products to pallets for shipping.

But the diversity of Kingdom manufacturing is increasing, and Paull said prospects for future growth are "definitely" looking up. The Newport industrial incubator facility is producing some very promising developments, she said. Newport Canvas Company, for example, located here about a year ago. Since then its sales of canvas promotional items, like beach bags, has soared to more than $300,000, after just three trade shows. This fall, the company plans to move its entire operation--and about 20 jobs including silk screening designing and stitching--from Quebec to Newport.

NSA Industries, a contract machine shop that does sheet metal fabrication, now has employment approaching 200 and just purchased more land in the St Johnsbury Industrial Park. "They won't tell me their plans but I don't believe they intend to farm it," Carter quipped.

North Country Engineering in Derby employs about 40 people producing machined parts made to customer specifications. Paull said a company called Terralogix that currently has an office in the Newport incubator building is "tied in with North Country Engineering." Terralogix has developed a device that can dramatically reduce automobile emissions. The company "is hoping to move production down here in about six months. "This is just the tip of the iceberg as far as this company is concerned," Paull said.

Late this Spring New England Composites Inc, which last year opened a facility in the St. Johnsbury/Lyndon Industrial Park, began the process of tripling its work. It has already increased about 12 to 15 positions, bringing total employment after less than a year in operation to about 40, Carter said. The Quebec-based bus body production company late this spring announced it planned to hire 40 new people by this month, bringing its work force to 60, in order to meet increasing demand for its products in the United States.