Earlier this month, the Entrepreneur Fund was proud to be a sponsor of Enterprise Minnesota’s State of Manufacturing regional survey events in Duluth and Grand Rapids.
The annual survey of over 500 Minnesota manufacturing executives provides insight into the concerns and opportunities impacting manufacturers across the state. The results and takeaways from this survey helps EFund staff better serve our small to mid-sized manufacturing clients across 16 counties in Minnesota.
According to the 2022 survey, recessionary fears more than doubled over the last year, from 18% to 43%, perennial concerns regarding retaining and attracting workers once again topped the list along with newcomer inflation.
Recession concerns rise
- 43% of manufactures expect a recession in 2023, but of those 85% are confident in their ability to withstand it. That confidence dips to 75% in companies with less than $1 million in revenue and dips just slightly to 83% in companies located in Greater Minnesota.
- 34% of respondents project a flat economy in 2023 and just 19% are optimistic about economic expansion.
- While most manufactures are still confident about the future, the levels are not back to the highs we saw before the pandemic with 94% of respondents reporting financial confidence in March 2017.
Workforce issues still top of mind
- While down from last year’s survey, workforce issues remain a top concern for manufacturers. More than half of the companies surveyed have open positions or are hiring, and of those 84% say they find it somewhat or very difficult to attract qualified candidates.
- 44% of manufacturers said finding new workers is still the most important driver of future growth while at the bottom of that list, only 7% said implementing and using automation was a factor. However, at the Duluth event Enterprise Minnesota staff noted that automation is something more manufactures in our region should consider.
- Minnesota DEED is now accepting applicants for their new Automation Loan Participation Program. Talk to your EFund advisor for more information on how we can help you through the process and provide the private financing match required for the loan. DEED grants are also available to train your existing staff on automation technology.
- This year inflation led the list of worries for manufactures, with 55% of respondents citing it as a concern.
- Inflation may be harder for smaller companies – those with lower revenue and fewer employees – and for companies in Greater Minnesota.
- 50% of companies with less than $1 million in revenue listed increasing material costs as a top concern. For comparison, 31% of companies over $5 million in revenue cited rising costs of materials as a top concern.
- 51% of respondents said they have no strategic plan in place. Among small manufacturers, those with less than $1 million in revenue, just 26% have a formal strategic plan. At the Duluth event on December 7 at Lake Superior College, Enterprise Minnesota President and CEO Bob Kill noted that having a strategic business plan and financial projections, such as cash flow projections, are especially important in an inflationary environment. Enterprise Minnesota and EFund advisors can assist manufacturers in those areas. Reach out to your EFund advisor or contact us using this short form to get that process started.
Thank you to Enterprise Minnesota for publishing the State of Manufacturing survey and for hosting events expanding on the findings as they relate to our specific region. The information gathered helps us all best serve manufacturers in Minnesota.