Toolmaker Marshalltown investing in Fayetteville expansion, workforce an issue

With sales tied closely to housing construction, the manager of toolmaker Marshalltown Company in Fayetteville said business is good for the company that employs around 200 in the area.

Jack Murders, plant manager for Marshalltown in Fayetteville, told Talk Business & Politics that housing data has been mixed in recent months but the tool business supplying construction was particularly strong in November and December.

He said while export sales are not doing well because of the high value of the U.S. dollar against other currencies, the retail sector where concrete construction tools are sold is picking up the slack for the Marshalltown, Iowa-based company.

“We do business with Home Depot and Lowe’s and we hear from them that there continues to considerable amounts of home improvement projects taking place. This is not tied to any index, but it’s a nice piece of business. It’s just not that easy to quantify,” Murders said.

Residential construction is good and the U.S. should see 1.15 million housing starts this year, but that’s still nowhere near the over 2 million starts in 2005 and  2006, according to Murders. He said highway construction taking place across the country is also helping to make up some of slack in housing’s volatility.

“Our business is good right now, but that could all change tomorrow,” he said.

Industry experts see the positive trend playing out for much of the year. Baird analyst Timothy Wojs, recently noted to investors that residential construction recovery has been steady. Most industry participants expect residential markets to grow mid-to-high single-digits in 2016, supported by 10% new construction growth and mid-single-digit repair/remodel growth. The growth rates imply a continuation of growth from 2015 into 2016.

Wojs said nonresidential construction expectations also stay positive, despite recent choppiness in some of the macro economic data. The 2016 outlook for nonresidential construction is congealing around low-to-mid single-digit growth for the building manufacturer sector.

“We recently attended the International Roofing Expo, where industry participants noted a solid commercial backlog with expectations for 2016 growth ranging from 3% to 8%. Growth appears broad-based across most verticals, Wojs noted.

LOCAL EXPANSION
The Marshalltown plant in Fayetteville is in the midst of a two-story, 52,000 square foot expansion expected to be completed by mid-summer. Murders said the space was needed because they are out of office space and floor manufacturing space.

Murders said the construction industry has created more new products, processes and business for Marshalltown which is why the additional space was needed. The local plants make between 3,000 and 4,000 different tools and machinery used in drywall and concrete construction.

He did not provide any financials for the plant expansion. Murders said the large plant on Industrial Boulevard has had no major renovations or expansion in the past 20 years. Once completed the local plant will be 400,000 square feet. For building permit purposes, the city of Fayetteville pegs the value of the addition at $4.6 million.

He said the company is also in the midst of adding a new distribution center in the Industrial Park to handle more inventory. He had no details to share about this second project, but did say once the distribution warehouse was completed there would be room to add a few more employees.

WORKFORCE CONSTRAINTS
Murders said the plant employs roughly 200 workers and the workforce for manufacturing specialists is tight.

“We have had decent luck finding hourly personnel, but maintenance engineers and tool and die engineers are extremely tough to find. We have expanded our recruitment effort to Oklahoma State, Missouri State and Arkansas Tech this year. We always see a pretty good crop of new grads but the seasoned veterans are much harder to find,” Murders said.

He said Marshalltown typically hires a lot of engineering interns from the University of Arkansas each year and that’s been a good pipeline. In fact, Murders began his career at Marshalltown as an intern 30 years ago.

“This year we could hire 15 interns,” he said. “We also are exploring a partnership with NTI in Springdale to try and come up with other pipelines for the skilled trades,” Murders said. “This is critical to health of our industry over the next 10 to 15 years. So many of the jobs are automated with robotics and we need workers with technical skills to operate this machinery. It’s a good career and a well paying job.”