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South Dakota e-Labor Bulletin

September 2021

Producing a Name for Itself: South Dakota’s Manufacturing Industry

In recognition of South Dakota Manufacturing Week Sept. 27-Oct. 1, we’re featuring the industry because of its important role in the state’s economy.

• South Dakota manufacturers are noteworthy employers, with 43,131 workers and accounting for 12.5% of all workers in the state’s privately owned establishments in 2020. There were 1,107 Manufacturing establishments in the state.
• The Manufacturing industry also plays a huge role in payrolls, contributing 13.5% to the state’s privately owned establishment payrolls in 2020. Those employers had a combined payroll of $2,298,450,792 last year, with weekly pay per employee averaging $1,025.

Manufacturing establishments are engaged in the mechanical, physical or chemical transformation of materials, substances or components into new products. Manufacturers are sometimes divided into two categories based on whether they produce mainly durable or nondurable goods.

Durable and Nondurable Goods

Establishments included in durable goods manufacturing produce goods with a normal life expectancy of three or more years. These items typically consist of higher dollar products, such as machinery, furniture, building materials and electronic equipment. Just a few of the examples of the unique durable goods manufactured in South Dakota are radio and TV wireless communication equipment; electronic signs, score boards and video displays; telescopic bucket trucks used for electric utility work; motor vehicle bodies; wood cabinetry for entire homes; commercial fans and blowers; textile bag and canvass coverings; and wood trusses.

Nondurable goods generally have a normal life expectancy of less than three years. Think food and beverage, clothing and paper products. South Dakota manufacturers produce and process a diverse variety of nondurable goods, ranging from respirator masks and industrial tape to explosives and ammunition, and from wine and meat products to ethanol and soybean oils.

About the Manufacturing Data Available

The Manufacturing employment and pay data above is from the Quarterly Census of Employment and Wages (QCEW) program, which encompasses workers covered by South Dakota unemployment insurance law and the Unemployment Compensation for Federal Employees (UCFE) program. Covered workers include employees who are paid a wage or salary during the year; it excludes the self-employed and unpaid family workers. Employment included in the QCEW statistics represents about 96% of all wage and salary civilian employment in the state.

Industry employment and wage data are compiled using the North American Industry Classification System (NAICS). NAICS categorizes businesses into one of 20 sectors, including public administration (government agencies). Businesses are then classified into more specific categories within a sector, represented by codes up to six digits. The more digits a code has, the more specific the business activity. Manufacturing encompasses NAICS codes beginning with 31, 32 and 33.

History of Manufacturing in South Dakota

Manufacturing has existed in South Dakota since before employment data for the industry was first published (November 1949, when employment was estimated at just 11,400). But the Manufacturing industry rose to its place of prominence in the South Dakota economy beginning in the 1970s, as the state’s nonfarm sector became more industrialized. There was an important transition from a labor market heavily dependent upon actual agricultural production for jobs to one where the processing and distribution of products (many utilizing raw ag materials) provided many jobs.

Small, labor-intensive manufacturers started all over South Dakota in the early 70s. Nonfarm wage and salaried worker estimates published in the South Dakota Labor Bulletin show Manufacturing industry employment hovered between 15,000 and 16,000 in the early 70s. By the second half of the 70s, some of the smaller manufacturing firms closed, but others rapidly expanded. Again citing nonfarm data published in the Labor Bulletin, Manufacturing employment had reached nearly 27,000 by the end of 1979.

Despite some year-to-year struggles when employment suffered some declines in the early to mid-80s, South Dakota’s Manufacturing industry continued an overall growth trend through the 80s and 90s. With rapid growth in certain manufacturing subsectors, several larger firms became very influential to employment trends in the state. The larger firms especially were closely tied to national and international markets.

Computerization’s impacts during the 80s and 90s were huge for this industry. There were phenomenal advancements in technology and mechanization which made manufacturing processes more efficient. The economy became increasingly globalized, largely due to electronic transmission of data and communications.

From 1985 to 1997, South Dakota Manufacturing employment climbed steadily upward. There were 1,056 manufacturers in the state by 1997; they employed 42,481 workers.
The early 2000s brought several minor downturns as South Dakota manufacturers were sensitive to certain national trends, such as outsourcing and greater automation, as companies attempted to raise profits. But from 2003 to 2008, South Dakota Manufacturing employment growth was back on track. In fact, South Dakota’s 1,166 Manufacturing establishments employed 42,693 workers by 2008. Then the recession hit South Dakota manufacturers, with a loss of 10 establishments and nearly 5,000 workers (11.7%) from 2008 to 2009.

After recovering from the recession and with the exception of a slight employment drop (1.0%) in 2016, South Dakota’s Manufacturing employment was then on the grow again, reaching 44,972 by 2019. Then the COVID-19 pandemic struck in 2020.

Just for fun, read some interesting Manufacturing trend tidbits we found as we researched the industry's labor market history.

Manufacturing During the Pandemic

The Manufacturing sector’s employment level decreased by 1,841 workers (4.1%) to a total of 43,131 workers during 2020.

Just four of Manufacturing’s 21 industry subsectors showed a gain in the number of workers during 2020; only one had growth of more than 10 workers.

• Food Manufacturing (NAICS 311): 170 workers (1.6%)
• Apparel Manufacturing (NAICS 315): eight workers (16.7%)
• Paper Manufacturing (NAICS 322): four workers (0.6%)
• Electrical Equipment and Appliance Manufacturing (NAICS 335): nine workers (1.9%)

As shown above, the Food Manufacturing subsector grew the most out of all Manufacturing subsectors in 2020. The increase of 170 workers was mostly in Animal Slaughtering and Processing, and Dairy Product Manufacturing. While the pandemic had negative impacts on employment levels in many of the state's industries (including the Manufacturing subsectors discussed below), demand for these food products remained strong.

Six Manufacturing subsectors experienced significant (more than 100) worker losses during 2020, as listed below.

• Machinery Manufacturing (NAICS 333): 584 workers (8.6%)
• Transportation Equipment Manufacturing (NAICS 336): 341 workers (9.2%)
• Fabricated Metal Product Manufacturing (NAICS 332): 305 workers (7.7%)
• Miscellaneous Manufacturing (NAICS 339): 239 workers (4.9%)
• Furniture and Related Product Manufacturing (NAICS 337): 195 workers (8.2%)
• Plastics and Rubber Products Manufacturing (NAICS 326): 111 workers (6.9%)

Manufacturing in 2021

Based on the most current QCEW data available (first quarter 2021), it looks like Manufacturing is slowly recouping employment cuts made during the worst of the pandemic. In fact, February 2021 employment in the industry was 43,166, nearly 98% of the level recorded in February 2020 before the pandemic hit the state. Although slight (260 or 0.6%), Manufacturing employment made another small gain in March 2021.

Manufacturing in the Future

South Dakota’s Manufacturing industry is projected to add 3,242 workers to South Dakota’s economy (from a level of 44,392 in 2018 to a level of 47,634 in 2028, a 7.3% increase). At a national level, Manufacturing employment is projected to decline by 5.0%.

Two of South Dakota’s Manufacturing subsectors are among the 10 projected to grow the fastest to 2028.

• Transportation Equipment Manufacturing (NAICS 336)
• Food Manufacturing (NAICS 311)

The Transportation Equipment Manufacturing subsector is projected to add 505 workers in South Dakota (a 14.1% increase) over the next decade. This subsector is comprised of businesses producing equipment used to transport people and goods. An entire subsector is devoted to this activity because of the significance of its economic size. Driving the growth within this subsector are three four-digit NAICS industries expected to have double digit employment growth in the coming decade.

• Motor Vehicle Body and Trailer Manufacturing (NAICS 3362)
• Motor Vehicle Manufacturing (NAICS 3361)
• Motor Vehicle Parts Manufacturing (NAICS 3363)

The growth can be attributed to the needs of consumers purchasing the products this subsector manufactures as well as a growth in disposable income.

The Food Manufacturing subsector is projected to add 1,313 workers in South Dakota (12.8% increase) over the next decade. Manufacturers in this subsector transform livestock and agricultural products into products for intermediate or final consumption. The industry groups are distinguished by the raw materials (generally of animal or vegetable origin) processed into food products. Consumer demand for agricultural products and an increasing population are large factors driving the need for workers within the food manufacturing industry.

On the flip side, there are also two Manufacturing subsectors on the list of those 10 projected to decline or show the slowest growth to 2028. The two are closely related, and not surprising in this electronic age: Printing and Related Support Activities (NAICS 323) and Paper Manufacturing (NAICS 332).

The number of workers employed in the Printing and Related Support Activities subsector is expected to decrease by 83 (or 6.3%) in South Dakota by 2028. These establishments print products such as newspapers, books, labels, business cards, stationery, business forms and other materials, and perform support activities such as data imaging, platemaking services and bookbinding. With preferences among many consumers having changed to electronic format for books, magazines and newspapers, the demand for physically printed information has greatly decreased. South Dakota worker levels in this subsector showed a double-digit percent decline from 2008 to 2018.

Worker levels in the Paper Manufacturing subsector are projected to decrease by two workers (or 0.3%). Several factors, such as the transition from print to online information, consumer demand and improved manufacturing and automation processes, are affecting this industry.

Manufacturing Occupations

South Dakota’s Manufacturing industry offers great job opportunities across a wide range of occupations. Many of those occupations are directly involved in production as one would expect, including the examples below.

• Coating, Painting and Spraying Machine Setters, Operators and Tenders
• Electrical, Electronic and Electromechanical Assemblers
• First-Line Supervisors of Production and Operating Workers
• Industrial Machinery Mechanics
• Inspectors, Testers, Sorters, Samplers and Weighers
• Laborers and Freight, Stock and Material Movers, Hand
• Meat, Poultry and Fish Cutters and Trimmers
• Miscellaneous Assemblers and Fabricators
• Packaging and Filling Machine Operators and Tenders
• Welders, Cutters, Solderers and Brazers

A wide variety of other career opportunities can be found in Manufacturing as well. Just a few examples are listed below.

• Accountants and Auditors
• Buyers and Purchasing Agents
• Customer Service Representatives
• Electricians
• General and Operations Managers
• General Office Clerks
• Graphic Designers
• Heavy and Tractor-Trailer Truck Drivers
• Janitors and Cleaners
• Sales Representatives, Wholesale and Manufacturing

Current Job Opportunities

In August 2021, there were 2,500 Manufacturing job openings advertised online in South Dakota. The top 10 South Dakota counties with the highest number of Manufacturing job openings were Minnehaha County (621), Brookings County (312), Yankton County (221), Codington County (208), Davison County (169), Pennington County (142), Union County (141), Brown County (129), Beadle County (84) and Lake County (71).

To find current job opportunities in Manufacturing, visit sdjobs.org and click on Find a Job.

For More Information

Check out our flyer on Manufacturing in South Dakota (in Adobe PDF format).

For more information about historical trends in Manufacturing employment in South Dakota, see our Annual Summaries of QCEW data.

For the most current analysis of industry employment trends as the state works its way out of the pandemic, visit our Pandemic Picture page.