The State of Manufacturing 2018: Profits Boom but Workforce Crisis Looms

Industry survey foreshadows how Minnesota manufacturers must prepare
for potential damage from worsening worker shortage.

MINNEAPOLIS–(BUSINESS WIRE)–#MadeinMN–To say that times are good for Minnesota manufacturers would be an
understatement. According to the tenth annual State of Manufacturing®,
a comprehensive survey project sponsored by Enterprise Minnesota (www.enterpriseminnesota.org)
and its partners, manufacturers have almost a surreally high level of
optimism with expectations of record revenues, record profitability,
record-level of investment in their companies, and increased wages.
Sixty-four percent anticipate economic expansion ÔÇô a record high in the
surveyÔÇÖs history and twice the rate it was two years ago.

The sobering counterweight to this enthusiasm is the anticipated
workforce shortage. The challenges of attracting and retaining both
skilled and unskilled workers loom large and may impede the growth of
the industry. Notably and for the first time, large and urban
manufacturers are indicating an increased urgency about workforce
issues, narrowing the traditional gap that past State of Manufacturing
surveys have revealed between Twin Cities and Greater MinnesotaÔÇÖs
concerns over attracting and retaining qualified workers.

Specifically, 48 percent of survey respondents said that attracting and
retaining a qualified workforce is one of the biggest challenges they
face that might negatively impact future growth; thatÔÇÖs up 13 points
from 34 percent in 2017. And yet an unexpectedly small number of
manufacturers are preparing their operations for this shortage, whether
by improved leadership training, increased productivity, or strategic
planning. For example, barely half (53 percent) are using a formal
strategic planning process to prepare for the shortage.

Health care continues to be a major concern for MinnesotaÔÇÖs
manufacturers, topping the list of issues for the tenth time in the ten
years of the survey. RespondentsÔÇÖ worry about health care has shown a
slow rise in intensity, topping out this year at 60 percent and beating
out ÔÇ£attracting qualified workersÔÇØ by 13 percent.

Two-thirds (67 percent) of respondents support the recent Federal Tax
Cuts and Jobs Act, though the actual impact to a company is uncertain;
45 percent of respondents say that it will help their organization and
42 percent predict that it will have no impact.

ÔÇ£This yearÔÇÖs survey is as much about revealing questions as it is
uncovering answers,ÔÇØ said Bob Kill, Enterprise Minnesota president and
CEO. ÔÇ£The ability of MinnesotaÔÇÖs manufacturers to weather the crisis ÔÇô
and come out stronger ÔÇô will depend on how well they prepare for its
challenges rather than react to them. Comprehensive strategic planning,
automation and technology, deliberate training and recruitment programs,
along with community collaborations will be more important than ever.ÔÇØ

The results of the survey will be presented at a series of regional
events throughout Minnesota from May 17 to June 13 in Minneapolis,
Redwood Falls, Duluth, Morris, Owatonna, St. Cloud and Bemidji. Click
here for more information on State of Manufacturing events.

Bob Kill, president and CEO of Enterprise Minnesota, is available for
media interviews. Interviews can be arranged through Lynn Shelton
612-455-4215 and 651-357-7808 or Chris Morse 612-455-4213 and
952-649-8921 of Enterprise Minnesota.

Rob Autry, president of Meeting
Street Research has been pollster for all ten years of the survey.
Throughout the month of March, he conducted telephone interviews with
over 400 manufacturing executives representing a geographically
proportional cross-section of Minnesota. The survey was complemented by
14 focus groups of manufacturing leaders, high school and college
students interested in a manufacturing career and ÔÇô for the first time
this year ÔÇô parents of a current or recent high school student. The poll
has an error rate of +/- 4.9 percent.

Full survey top-line results and cross tabulations are available at www.stateofmanufacturing.com.

Platinum sponsors for The State of Manufacturing are: Bremer
Bank, Granite
Equity Partners, Gray
Plant Moody, King
Solutions, Marsh
& McLennan Agency, the Minnesota
Department of Economic Development and Employment (DEED), and RSM.
Gold sponsors are the Blandin
Foundation and Widseth
Smith Nolting.

About Enterprise Minnesota
Enterprise
Minnesota is an ISO
9001:2008 certified consulting organization that works with medium
and smaller manufacturing enterprises to help them compete and grow
profitably, and also serves as the ÔÇ£voiceÔÇØ for the industry, raising
visibility and appreciation for the value manufacturers provide our
communities and the stateÔÇÖs economy. Our affiliation with the Manufacturing
Extension Partnership (MEP) further positions us to offer clients
leading-edge services to improve manufacturing operations and strengthen
business.

In the last five years alone Enterprise Minnesota has helped over 510
Minnesota manufacturing companies gain access to strategies that
increase efficiency and promote growth. Resulting from the
organizationÔÇÖs work, clients have realized a total positive economic
impact of over $696 million in sales, reduced costs by over $131
million, invested over $289 million in capital expenditures and
modernization and added or retained over 6,600 jobs.

Contacts

Enterprise Minnesota
Lynn Shelton, 612-455-4215 and
651-357-7808
Vice President of Marketing
[email protected]
or
Chris
Morse, 612-455-4213 and 952-649-8921
Public Relations Manager
[email protected]