Study: Duluth’s industrial economy sets strong foundation for future growth

An operator adjusts a milling machine at GPM, a Duluth manufacturer of industrial pumps. The firm is one of many that reflect the new era of clean manufacturing by companies that provide living wage jobs.

A study conducted for the Duluth Seaway Port Authority found Duluth’s industrial sector is an important component its economy. It further concluded it will be the catalyst that spurs equitable future growth across all other sectors to give Duluth a truly competitive advantage in attracting new companies and residents.     

The Port Authority contracted with the Initiative for a Competitive Inner City (ICIC) to analyze and benchmark Duluth’s industrial economy — focusing on the contribution, assets and industry sectors necessary to drive diversified growth across the community.  

“When it comes to job creation and accessibility, sustainable wages and benefits, plus generating tax revenues to support growth, the ICIC report pinpointed just how strong a foundation Duluth’s industry provides,” Port Authority Executive Director Deb DeLuca said in a synopsis. “Findings underscore how a stronger, more diversified economy in Duluth begins with expanding not only the number of jobs but also the quality of the employment opportunities accessible to the broader community. That kind of ‘economic spark’ speaks volumes when incentivizing investment in existing and emerging industrial clusters.” 

The ICIC report said:

  • The city’s aggregate industrial sector continues to drive significant economic growth in both Duluth and the surrounding region.  
  • Duluth’s industrial jobs pay higher wages, and provide competitive benefits and opportunities for career advancement — with an average annual income of $61,000 compared to $47,000 in the city overall. 
  • On a per job basis, while the rest of Duluth’s economy may be five-times larger, the industrial sector generates three-times more local tax revenue per job.

  • Every 10 industrial jobs create eight additional jobs elsewhere in Duluth’s economy.  
  • Jobs created in the industrial sector are accessible to residents with a wide range of educational backgrounds — from high school graduates to people in the trades and those with specialized technical training, as well as college graduates.  

“Growing Duluth’s industrial sector will require significant land development,” DeLuca noted. “However, of the 1,600 acres of industrial zoned land currently available, the report indicated several challenges with regard to access, infrastructure, parcel size, location, environmental and geotechnical issues that lead to a scarcity of vacant, developable land. Compared to peer cities, our pipeline of ‘shovel ready’ sites could limit our competitiveness for industrial business attraction, retention and expansion.”            

The report said supporting and enlarging the industrial sector will require leadership from both the public and private sectors, and coordinated economic development strategies should recognize the importance of industry alongside other sectors of Duluth’s economy.

“Industrial jobs have evolved with advances in technology and commitments to process improvement,” said Dave Faynik, general manager of Altec Industries, Inc., which is located in Clure Marine Terminal. “Industry in this century looks and behaves in a much more socially responsible manner. Companies understand, respect and lead innovation to create safe workplaces and minimize their environmental footprints.”

The study concludes by recommending a number of priorities including strengthening the visibility of industry’s impact in Duluth; investing in “high-return” industrial assets; targeting economic development to address gaps in industrial clusters and developing policies that create a more supportive business environment for industry. 

The Port Authority invited an 11-member advisory committee to help frame the research and provide feedback. Members were Lisa Bodine, Karen Diver, David Raynik, Adam Fulton, Brian Hanson, Phil Jents, Lars Kuehnow, Nancy Norr, Neal Ronquist, Andrea Schokker and Tony Sertich.