WORTHINGTON — Workforce challenges, overall inflation concerns and attracting qualified workers top the list of worries for Minnesota manufacturers, according to Enterprises Minnesota’s State of Manufacturing survey, which was presented to regional manufacturers and industry stakeholders on Tuesday at the Worthington Event Center.
Conducted in August and September of 2022, this year marked the 14th annual survey of manufacturing executives in Minnesota, with over 400 executives participating.
“We believe that small to mid-size manufacturing needs a voice at the legislature,” said Enterprise Minnesota President Bob Kill, on the need for the survey. “When we work with clients, we want to measure for their success, and when we work and present this, we want to make sure you take something away today.”
Enterprise Minnesota, in existence for about 35 years, is a consulting organization focused on “helping manufacturers grow profitability,” Kill said. They work with businesses across the state as part of the Manufacturing Extension Partnership National Network, helping manufacturers grow their businesses.
In Minnesota, there are approximately 7,300 manufacturers, with about 4,000 of those companies employing under 10 people. The findings of the survey, presented by research firm Meeting Streets Insights on behalf of Enterprise Minnesota, are subsequently broken down into categories based on revenue and number of employees.
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According to the survey results, inflation and rising costs are a primary concern, especially in rural areas and for smaller manufacturers.
Concerns over an impending recession more than doubled since last year, with 43% of manufacturers predicting an economic decline for 2023. However, even with growing fears of a recession on the horizon, 88% of manufacturers surveyed felt confident in their ability to withstand such an event. Additionally, 63% of respondents said future investments would go toward managing cost increases due to inflation.
“I think manufacturers feel pretty confident that despite the challenges of maybe a looming recession, inflation, and a number of other things, they’ve already weathered a pretty tough storm that they hadn’t anticipated over the last … three years,” Kill noted.
While overall inflation topped the list of manufacturers' worries at 55%, attracting qualified workers and retaining qualified workers were also among the chief concerns, with 53% and 43% of participants expressing concern over the respective workforce issues.
Finding new workers was found to be the most important driver of future growth for manufacturing businesses, but 84% of survey participants indicated difficulties with attracting new employees. This, Kill suggested, contributed to the increased value manufacturers had placed on creating good and safe work environments, in order to make themselves more attractive to potential employees.
“Listening to the people in this room, you can hear the importance of developing programs to make people want to come to work and …creating a community that everyone wants to work in,” he noted.
Fostering workforce programs in academic environments and addressing housing and childcare shortages in southwest Minnesota were both brought up as additional ways to draw and retain workers.
“For us, as we think about the workforce, childcare and housing are the topics that continually come up. This is a significant issue for attraction and retention of talent,” said Scott Marquardt, president of the Southwest Initiative Foundation, which sponsored the State of Manufacturing event and works to address community issues in the region. “So that's been big for us too, is anything we can do to support the locally and regionally based childcare and housing initiatives.”
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Ten years ago, Marquardt said a study estimated one in five workers in the southwest region worked manufacturing-related jobs. As agricultural and food manufacturing has continued to have a vital presence in this area, he’s confident those numbers have remained similar, adding to the importance of understanding trends in manufacturing for the state.
“We’re very blessed in this region to have the mix of large manufacturers … and then your independent companies that were born and created here,” he said. “It’s just a beautiful mix of large and small local (businesses) and international.”
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