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County: Orbit jobs will have multiplier effect
by BY REBECCA PALMER
Dec 13, 2012 | 1652 views | 0 0 comments | 3 3 recommendations | email to a friend | print

NORTH SALT LAKE – The 60 manufacturing, technical and engineering jobs Orbit Irrigation Products, Inc. plans to bring will be a boon for the local economy because of their unique multiplier effect, said Davis County Economic Development Director Kent Sulser.

Manufacturing jobs are particularly important because they help create other jobs in two ways, he said.

First, those jobs use materials that often have to be created locally, so support raw products industries. Then, because manufacturing jobs tend to have higher wages than jobs in other sectors, they allow families to spend money in sectors such as retail, entertainment and hospitality.

According to The Manufacturing Institute, every dollar in final sales of manufactured products supports $1.40 in output from other sectors of the economy, the largest of an sector. In comparison, wholesale and retail trade sectors generate only 55 cents and 58 cents, respectively, in other additional inputs for every dollar of economic activity they generate themselves.

Orbit announced last week that it will bring back at least 60 full-time jobs from Asia over the next 15 years. The company will have funding help from state and local governments for its efforts.

More than 9 percent of employees in Davis County work in the manufacturing sector, according to the Utah Department of Workforce Services. That figure was slightly higher in 2011 than it was during the recession. However, 11 percent of jobs in Davis were in the manufacturing sector in 2000.

The county is seeking new manufacturing jobs as part of its economic development efforts with programs such as the shovel-ready initiative that prepares certain districts for various types of companies, should those companies show any interest in locating in Davis County. The county also uses tax-increment financing, which uses as a subsidy a portion of the increased tax revenues that new developments bring in.

North Salt Lake has one of those tax increment financing plans, known as a community development area, in the industrial park where Orbit’s headquarters is located at 845 Overland Street.

“We are very pleased that Orbit has decided to expand in North Salt Lake, said Mayor Len Arave in a press release. “Orbit is already a great corporate citizen providing many jobs for skilled workers along the Wasatch Front. I know it has been a complex financial decision, and we are appreciative of Orbit and all the other individuals and agencies that have rallied around this proposal to make it a reality. Orbit’s positive impact on our community will only increase as they expand their operations in our city.”

Each of the 60 jobs Orbit plans to bring back to the U.S. is expected to pay at least 125 percent of the Davis County median wage, which is about $37,000 per year. If the plans are accomplished, Orbit will get a tax incentive equal to 20 percent of its total bill.

The incentive would come through the Utah Governor’s Office of Economic Development (GOED.) After the company proves that it has invested the $37 million it promised and hired the new employees, it will get a tax credit of 20 cents on the dollar to use toward future levies, said GOED spokesman Michael Sullivan. It could total up to $2,408,896.

Part of the deal requires that Orbit create new products in addition to the wide selection of sprinkler products it already offers.

One of those products will be PVC pipes for sprinkler lines that can be attached without glue, a spokesman from the company said. Using a system of O-rings, these can be attached and adjusted and will hold water for years.

Orbit’s growth plans could take up to 15 years an dht company would still be eligible for the subsidy, but the new jobs and expansion of its facilities will probably occur within five years, the spokesman said.

“Orbit is a family company with deep roots in Northern Utah,” said Orbit CEO, KC Ericksen in a press release. “We are optimistic about our future growth and equally as thrilled to be able to bring jobs back to our community.” 

rpalmer@davisclipper.com

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