Manufacturers Optimistic But Face Skilled-Worker Shortage
According to annual survey results released Thursday, Minnesota’s manufacturers are more confident in the future of their firms than they have been since 2009.
The survey, commissioned by manufacturing consulting group Enterprise Minnesota, concluded that 84 percent of manufacturing executives were confident in their firms’ future, the highest mark in the survey’s six-year history.
The findings echo Twin Cities Business’ latest Quarterly Economic Indicator Survey, which polled business leaders across the state and found that companies are ramping up production as they anticipate further economic recovery.
For the manufacturing survey, confidence was especially high—at 96 percent—among companies with more than $5 million in annual revenue. Also, the number of manufacturers that said they were “very confident” jumped to 36 percent, up from 28 percent last year.
Forty-five percent of manufacturing executives are more optimistic that their revenue will grow in 2014, up from 41 percent last year. And the overwhelming majority anticipates that the growth will come from new customers.
While confident, the participants also listed their top concerns as health care costs, government policies and regulations, and their ability to attract and retain qualified workers.
Health care was the top overall concern, with 59 percent of participants worried about the costs, followed by the concern over government policies at 55 percent, and the concern regarding the small pool of talented workers, at 34 percent. Concerns about attracting and retaining skilled workers are up from 14 percent in 2011—and that number is even higher outside the metro area, where 43 percent of manufacturing executives are concerned.
Companies with $5 million in revenue are especially concerned about the worker shortage, with 82 percent reporting trouble finding talented workers. This concern persists as 30 percent of executives expect their firms to grow in the year ahead.
“It is clear that Minnesota’s manufacturers are more confident about their future today than they have been at any point since the start of the recession,” Enterprise Minnesota President and CEO Bob Kill said in a statement. “The looming concern, however, is that many manufacturers are having difficulty finding qualified workers to remain competitive and sustain their growth. This challenge is significantly acute in Greater Minnesota.”
Although only 7 percent of participants have recessionary concerns for the national economy in 2014, Enterprise Minnesota said Minnesota’s own business climate is increasingly seen as unfavorable by manufacturers.
Fifty-one percent of the manufacturers surveyed said the state was “on the wrong track,” which was the highest total since 2010. And 48 percent believed that issues like “taxes, regulations, and policy uncertainties,” might negatively impact their firm’s growth.
The survey polled more than 400 Minnesota manufacturing executives. Enterprise Minnesota will be presenting its findings at the Minneapolis Convention Center Thursday night, click here to learn more.
To see the full results of TCB’s Quarterly Economic Indicator Survey, which encompasses outlooks from business leaders from all industries, click here.