Northeast Kingdom buoyed by healthy economy

Vermont Business Magazine, Aug 01, 2004 by Edelstein, Art

The Northeast Kingdom's economy this summer is strong, and economic leaders here say there is no reason to doubt this strength will continue into 2005. Long the weakest economic region in Vermont, the counties of Caledonia, Essex and Orleans have held the ominous title of highest unemployment rate for many years. While still above the state average, at 3.7 percent compared with 3.2 percent overall as of May, these numbers are dropping as more jobs are created here.

While higher than average unemployment figures continue to reflect the Kingdom's long term economic problems, which include a reliance on a few industries, and slow growth due to location, overall, say local leaders, the general economy is growing and employment is improving.

They are optimistic that the future looks good. They tout the area's strong manufacturing sector, a slow but steady growth in population, and more tourism fueled by unconventional outdoor activities, (see sidebar) as reasons to be upbeat.

Some negative factors, however, must still be addressed. The retail sector is lackluster and parts of the local infrastructure; including poor cell phone coverage, lack of extensive high speed Internet connectivity, and a sub par airport are hurting the Kingdom's ability to compete in the "modern" economy.

Manufacturing Is Strong in the Kingdom

Steve Patterson at Northeastern Vermont Development Association in St Johnsbury categorized the economy as "a mixed bag." But, there is a lot to be positive about, he said.

"We're seeing an awful lot of activity at the St Johnsbury-Lyndonville industrial park."

Here, the recently completed Charles E Carter Center for Excellence, a 23,000-square-foot facility has already attracted five companies. The building provides incubator, warehouse, storage and training space.

"There has been a lot of activity here," he acknowledged. Patterson points to the 700 people now employed at various manufacturing businesses at the park as a sign of a strong manufacturing sector.

"It's grown by 35 to 40 employees in the last year," he boasted.

There is a strong mix of successful companies in the area that Patterson said are helping the local manufacturing sector grow. Lydall, a manufacturer of insulation materials for cars and heat insulation is expanding. Mobile Medical, a company making mobile hospitals, has a lot of potential, while Radiant Tec, which makes water-heating units for floor heating, was "going great guns."

Also strong are Moose River Publishing, a trade magazine publisher and Microdata, a GIS mapping company Patterson called "a major success story."

Patterson pointed to a high end residential and hotel complex in the planning stage on Lake Memphremagog as a sign that Newport is growing.

Patterson was also pleased with developments at the long idle Gilman Paper Plant on the Connecticut River, which after a two-year shut down is up and running. The plant will rehire an expected 80 to 100 workers in the next 18 months. He called this "a huge boost to the area." The plant was bought by Dirigo Paper of Milton, MA.

"I think the economy is very stable," said Art Sanborn town administrator in Lyndonville and a member of the NVDA board. He, too, sees a strong manufacturing sector centered in the St Johnsbury-Lyndonville park, and also in Orleans, Newport and Beecher Falls where an Ethan Allen plant is located.

Sanborn said that plant has started to rehire workers. Ethan Allen employs over 500 workers in its two area plants.

"Their business is doing well and they are controlling energy costs with cogeneration," said Sanborn.

Sanborn looked down the I-91 corridor to the St Johnsbury area where NSA industries, a metal shop doing custom fabricating is healthy, as is Vermont Aerospace. He sees great strength in Lyndon Woodworking, which manufactures hardwood furnishings. Long established EHV Weidman, he said, "has stabilized after problems with international competition."

In Newport, Sanborn pointed to the Bogner Co. an apparel manufacturer, as strong. MSA, which manufactures helmets for the armed forces, has received several contracts and is thriving. These two companies have expanded the job market at the top of the state, adding a significant number of workers in the past six months. More jobs are expected with additional contracts.

Mary Paull at NVDA in Newport categorized the economy here as "slow, steady growth." She said MSA's 125 employees and three shifts are indicative of a strong company. At the other end of the product spectrum is Vermont Teddy Bear's continued growth up from 25 workers to nearly 100 employees.

Island Pond Woodworkers, the company formed from the former Ethan Allen plant, is showing steady growth, said Paull, with good orders and 18 employees.

Paull said she has begun fielding inquiries from Canadian companies looking for manufacturing space in the area as a branch site in the US.

"There wasn't interest in expanding for a couple of years," she explained, "due to the economy and world situation."

Already here is Montreal based Louis Garneau USA, making spandex cycling clothing and cycle helmets. It employs 50.