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Revisiting Newton, Iowa: How a Small Town’s Economy Grew Stronger After Losing Its Largest Employer

November 12, 2015 by Laura Pizzo

President Obama speaks in Newton, Iowa (AP Photo)

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You may remember the story of Newton, Iowa—where there is a long history of manufacturing, but where, in 2008, it was uncertain if that would continue. That year, Maytag (a manufacturer of household appliances and Newton’s largest employer) closed its doors, laying off nearly 1,900 workers in a town of only 16,000 people and nearly crippling the local economy.

In response, the Newton Transformation Council used a federal Regional Innovation Grant (RIG) to partner with EMSI and Maher & Maher. Together, they sketched out a revitalization plan, and by the fall of 2008, Newton had attracted more than 1,200 new jobs in advanced manufacturing and high-tech industries, including wind tower and turbine manufacturers.

Today, Newton’s economy is even stronger.

“This is one thing that amazes me: In the mid-90s, Maytag employed over 4,000 people combined between the factory and the headquarters,” said Frank Liebl, executive director of the Newton Development Corporation. “Despite losing all those jobs, Newton’s population has stayed relatively the same.”

And spirits are up, added Liebl. That’s because Jasper County (where Newton is located) has surpassed 2008 job counts and has been driving unemployment into the ground.

This revitalization has earned the small town national recognition. In 2012, President Obama visited Newton to speak about job creation, post-recession revitalization, and clean energy. Newton has even earned national recognition as one of the “2015 Top Ten Affordable Small Towns Where You’d Actually Want to Live” by Realtor.com.

Here’s the backstory on Newton’s renaissance, using the latest labor market data and on-the-ground perspectives from Liebl and other stakeholders.

Unemployment

20151102 Iowa Unemployment-01-2

In 2015, Jasper County finally reached an unemployment rate below state levels—an early goal of the Newton Transformation Council, said Kim Didier, founding partner of the Council and former director of the Newton Development Corporation.

That’s a huge accomplishment, considering that in January of 2008 the unemployment rate in Jasper County (9.6%) was nearly triple the unemployment rate in Iowa (3.7%).

Growing Industries

Here are a few industries that are contributing to Newton’s recovery.

Industries for Newton post

As mentioned above, wind energy has a lot to do with Newton’s recovery—although, it’s the manufacturing of equipment rather than wind energy itself. Two companies (TPI Composites, a wind turbine manufacturer, and Trinity, which manufactures wind towers) moved to the area after Maytag’s departure. Together, these companies employ over 1,500 employees, said Liebl.

And the chart shows how powerful that change has been for the local economy—with the turbine and turbine generator set units manufacturing industry growing by 2598% in seven years.

The area has recruited other manufacturing businesses as well, including manufacturers of cereal and snack food boxes, hydraulic hoses, and waterslides, said Liebl.

But, as the chart demonstrates, Jasper County’s economy contains a lot more than just manufacturing these days—commercial printing and call centers also have a significant and growing presence in the area.

“Our goal as an economic development team was to get jobs in Newton and try to diversify our employment base,” said Liebl. “And as you can see [from the companies that have landed since Maytag’s departure], we have some diversity.”

Keeping Up the Momentum

20151102 Iowa Unemployment-02-2Jasper County indeed has a lot to celebrate about surpassing 2008 job counts. But unfortunately, it has not reached pre-recession job counts—falling about 3,000 jobs short of where it was in 2001.

With further to go, what strategies is the region employing to keep the momentum up and continue to revitalize its economy? Here are a few that Liebl and Kelly Mitchell, a business solutions consultant at Des Moines Area Community College (DMACC) Business Recourses, shared with EMSI:

  • Improve housing quality: In an effort to make the community more appealing, Newton has begun to tear down dangerous and dilapidated housing and is in the process of building new homes. “For the first time in many years, we have new housing starts,” said Liebl. “Builders are coming to the community to build spec homes thanks to the city’s housing initiative.”
  • Award-winning marketing strategies: In an effort to revamp the city’s image, Newton community leaders came together and created a strategic marketing plan called Get to Know Newton, which won the “2015 Project of the Year” award from the Iowa City Manager’s Association.
  • Support for young professionals: The Newton Development Corporation gave seed money to the Jasper County Young Professionals, which will hopefully help attract younger professionals to the region.
  • Community partnerships: There are a number of partnerships across the region that are driving productivity. For example, DMACC Business Recourses partners with employers in Jasper County and elsewhere, offering training grants for on-the-job and classroom training, which help new companies get up and running faster. DMACC Business Resources offers other help as well, including advice on patents and exports, as well as support for economic development personnel.
  • Training programs: There are many training opportunities in the region. For example, along with more traditional educational programs at the college, DMACC partners with Goodwill Career Connection. This program offers assistance with résumés, interviews, and computer skills.

These strategies, among others, will further push Newton toward economic prosperity and help protect it from setbacks in the future.

For more on EMSI data—available at the county, MSA, and ZIP code level—or to see data for your region, contact us. Follow EMSI on Twitter (@DesktopEcon) or check us out on LinkedIn and Facebook.

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