Minnesota manufacturers confident, but concerned about worker shortage
Manufacturers in Minnesota remain confident in their firms' future going forward, but they remain mixed about an overall economic expansion and are worried about available qualified workers and health care.
Minnesota’s manufacturers remain confident in their firms’ futures, as solid revenue, profitability and capital expenditure projections hold steady for the second year in a row, according to The State of Manufacturing, a major survey research project sponsored by Enterprise Minnesota and partners.
From a financial perspective, 82% of executives say they are confident about the future of their firms. This high confidence level is remarkably consistent with data from 2011’s survey, and spreads across companies of all sizes, locations and revenues.
However, there are some signs that last year’s optimism has subsided a bit. When asked whether they anticipate an economic expansion, a flat economy or a recession, 32% of executives say they expect an economic expansion, down from 40% in 2011. Meanwhile, the percentage of executives who anticipate a flat economy has increased from 49% in 2011 to 55% in 2012.
On key projections for their own firms, executives continue to exhibit much more confidence than they did three years ago, when 32% of executives expected their gross revenues to decline, 34% expected their profitability to decline, and more than one in three (37%) expected their capital expenditures to decrease. This year, only 8% of executives anticipate a decline in gross revenues, and only 13% expect a decline in profitability. Less than one in four (24%) executives expect their capital expenditures to decrease.
However, projections on these three indices are less rosy now than they were a year ago. Where 51% of executives anticipated an uptick in gross revenues and 32 anticipated an increase in capital expenditures in 2011, 47% anticipate increased gross revenues and 27% expect an increase in capital expenditures in 2012. The starkest contrast is seen in profitability projections. While 39% of executives expected their firm’s profitability to increase in 2011, only 31% expect it to increase in 2012.
“The value of manufacturing to a healthy economy cannot be stated strongly enough,” said Enterprise Minnesota President and CEO Bob Kill. “We saw manufacturing lead the way through the economic recovery in 2011 and the 2012 State of Manufacturing poll results validate that. Through innovation and investment, Minnesota manufacturers are growing, and they are adding high quality jobs.”
Health care dominates concerns: For the fourth year in a row, health care remains by far the top concern among a list of 11 different factors. Almost seven out of 10 (68%) manufacturing executives now say the cost of health care coverage is a concern for their firm. Health care also rises to the top of the list when it comes to important factors for recruitment. Fully 50% of executives report that affordable health care is an important factor in attracting workers to their firm, up 11%age points from our first survey four years ago. Interestingly, the importance of salary and wage expectations as a recruitment factor has decreased over time: where 43% of executives ranked it as important in 2009, only 22% of executives feel the same way in this year’s survey.
Qualified worker shortage: Though it ranked fourth on manufacturing executives’ collective list of concerns, worry over finding qualified workers has doubled over the past year. Thirty-one percent of executives say this issue is a concern for their firm, up from 14% in 2011. Firms of larger size and revenue are most likely to rate this as a concern.
Executives’ own experiences with recruitment echo their worries on the issue. Nearly six out of 10 (58%) executives say it is a challenge to attract qualified labor to their companies. This is a noticeable increase from 2011, when 45% reported difficulty in attracting qualified labor. The majority of firms across all sizes and locations appear to share this challenge. However, it is the larger companies in terms of revenue (more than $1 million) and size (more than 50 employees) that say it will affect their bottom line. These larger firms are also more likely to have added to their workforce over the past year. It appears that companies going through the hiring process are the most likely to report difficulty in and concern over recruiting qualified talent.
Shipping more internationally: The state’s manufacturing industry has hit a new high in the percentage of companies who say they ship internationally. Fully 47% of manufacturing executives now say their firm ships outside the U.S. Nearly one in five respondents (18%) says their firm ships more than 11% of its product overseas. Just three years ago, only 10% of manufacturers reported doing so. Of those who do export, nearly one-quarter (22%) report they are exporting more than they did one year ago.
- Events & Awards
- Magazine Archives
- Oil & Gas Engineering
- Salary Survey
- Digital Reports
Annual Salary Survey
After almost a decade of uncertainty, the confidence of plant floor managers is soaring. Even with a number of challenges and while implementing new technologies, there is a renewed sense of optimism among plant managers about their business and their future.
The respondents to the 2014 Plant Engineering Salary Survey come from throughout the U.S. and serve a variety of industries, but they are uniform in their optimism about manufacturing. This year’s survey found 79% consider manufacturing a secure career. That’s up from 75% in 2013 and significantly higher than the 63% figure when Plant Engineering first started asking that question a decade ago.