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Idaho’s efforts to attract firearms, ammunition makers have paid off

Gun range photo courtesy of KTVB-TV.

Gun range photo courtesy of KTVB-TV.

A recent survey ranked Idaho as the state most dependent on the firearms industry.

According to WalletHub, Idaho ranked first in the firearms industry, 10th in “gun prevalence,” and third in “gun politics.” Other states rounding out the top five were Montana, Alaska, South Dakota, and Wyoming. The study ranked Idaho as having the most firearms industry jobs per capita, and the highest total firearms-industry output per capita, tied with New Hampshire. The state did not rank in the top five for the highest average wages and benefits nor in the total taxes paid per capita.

The National Shooting Sports Foundation, one of the sources for the WalletHub study, noted in its Firearms and Ammunition Industry Economic Impact Report 2018 that the Idaho firearm and ammunition industry was responsible for 3,219 jobs with wages of $129 million and output of $556 million. Suppliers were responsible for an additional 1,500 jobs, $77 million in wages, and $300 million in output, while there were 1,371 induced jobs at $53 million in wages and $180 million in output, for a total of 6,090 jobs, $259 million in wages, and more than $1 billion in output, the report continued. Average wages were $42,600, while the federal excise tax collected was almost $10 million.

In 2008, the Idaho Department of Commerce started targeting the firearms industry, touting the state’s low wages, gun-friendly culture, and business-friendly environment. A June 2016 brochure encouraged firearms companies. “Idaho’s average workforce costs are 84 percent below the national average,” the flyer noted. “Recognized as a gun-friendly state by the National Rifle Association. Among the least restrictive gun laws in the nation.”

The program was successful. Idaho’s firearms and ammunition industry employment grew by nearly 40 percent from 2012 to 2017, said Megan Hill, a public information specialist for the Department of Commerce, citing EMSI figures. “Over this same period, the industry in the US as whole grew by 20 percent,” she said. “In 2017, Idaho had approximately 1,600 firearms and ammunition jobs.”

Several firearms companies moved to Idaho including Next Generation Arms in 2010, Caracal USA in 2014, Advantage Arms in 2015, and Nemo Arms in 2016, Hill said. “None of these companies received any incentives,” Hill pointed out. Vista Outdoors – formerly ATK — was awarded a tax reimbursement incentive for the expansion of its facility in Lewiston in 2016, but the company does not manufacture firearms there, Hill said.

But both nationally and statewide, the industry has been slowing down. Vista cited a reorganization involving severance, as well as a goodwill writeoff of $354 million, in its most recent earnings report. “A challenging retail environment and other market pressures resulted in deeper discounting of Vista Outdoor’s accessories products during the quarter ended January 1, 2017,” the company noted.

Published reports indicated that Howell Munitions & Technology also had layoffs, and that PNW Arms – quoted in the Commerce brochure – had filed for bankruptcy in July 2016. Attempts to reach the companies were unsuccessful. In addition, according to the Associated Press, Boise Gun Co. has closed. The Idaho Firearms and Accessories Manufacturers Association Inc. no longer exists.

“We did see a downtick with the most recent presidential election,” said Jeff Hoskinson, director of sales & marketing for MGM Targets, in Caldwell, though he said his company’s business remains good. “We are very heavily tied to the political undertones of the country” and there was no longer such a sense of urgency, he said. (A 2013 City Club program on Idaho’s firearms industry asked, presciently, what would happen to the industry should Republicans regain control of the presidency.)

Nationally, gun manufacturer Remington has filed for bankruptcy, while a number of retailers, including Dick’s and Fred Meyer, have changed their policies regarding selling firearms.  FBI background checks dropped in 2017 for the first time, while the first two months of 2018 were lower than those of 2017.

“As a whole, the firearms industry suffered a decline in sales mid- to late 2017,” said JR Shepard, CEO of Lone Wolf Distributors, in Priest River. “This was caused in part by overall confidence in the president’s firm pro-gun, pro-Second Amendment stance. The buying public was lethargic; there was no sense of urgency to purchase firearms, magazines or ammunition.” But things are changing, he said. “Although January 2018 sales reflected a stabilized 2017, February and March both showed 23 percent to 25 percent increases! Recent renewed attacks on the Second Amendment have once again bolstered sales. 2018 is looking healthy indeed.”

photo of doug mattoon

Doug Mattoon

“Overall, the industry remains a strong employer in this region,” said Doug Mattoon, president and CEO of Valley Vision, an economic development organization for the Lewis-Clark Valley, home to many of the state’s firearms manufacturers. “Vista Outdoor did reduce work force some through attrition.  Howell did do a layoff last year, but appears to be pretty steady during recent months. Our firearms and accessories manufacturers all appear to be doing well.”

About Sharon Fisher

Sharon Fisher is an Idaho Business Review staff writer, covering financial institutions, technology, and business development. She holds a bachelor of science in computer science from Rensselaer Polytechnic Institute, and a masters in public administration and graduate certificates in geographic informational analysis and in community and regional planning from Boise State University. She likes explaining things and going to meetings. Join me on Twitter at @IBR_SLFisher.