Bob Kill, president and CEO of Enterprise Minnesota, presents with a group Wednesday morning at the Owatonna Country Club during the annual State of Manufacturing event. (Emily Kahnke/southernminn.com)
Area leaders in the manufacturing industry took time to share their experiences with issues with the workforce, supply chain issues and more. (Emily Kahnke/southernminn.com)
Recessionary fears are on the top of many manufacturers throughout Minnesota. Last year, during the State of Manufacturing review, labor and material shortages were a primary concern.
While that still rings true during this year’s results, new fears around a potential recession leaves many pessimistic about what the next year will bring, as presented Wednesday morning during the State of Manufacturing event at the Owatonna Country Club.
Bob Kill, president and CEO of Enterprise Minnesota, presents with a group Wednesday morning at the Owatonna Country Club during the annual State of Manufacturing event. (Emily Kahnke/southernminn.com)
Bob Kill, president and CEO of Enterprise Minnesota said most manufacturers throughout the state, especially the southeastern region, are optimistic about the future, however those levels are not as high as was seen prior to the COVID-19 pandemic.
“Part of this survey is we have to conduct at least 50 interview with manufacturers in each of the six Minnesota Initiative Foundations regions,” he said. “Some people might be surprised to know that there’s more than 7,000 manufacturers in Minnesota. It seems like a lot but a handful of years ago there was over 11,000.”
Area leaders in the manufacturing industry took time to share their experiences with issues with the workforce, supply chain issues and more. (Emily Kahnke/southernminn.com)
Each year, the State of Manufacturing conducts a statewide survey, with more than 500 manufacturing executives, to show current trends in areas of growth, workforce, supply chain, economic confidence and more.
The effects of COVID-19 still linger throughout the industry with supply chain shortages and struggling to attract and retain workers. However, Kill was quick to note that in the southeast region of Minnesota, many manufacturers had the benefit of several major highways at their disposal.
“Here in this region we have around one thousand manufacturers,” Kill said. “This region like Owatonna, Austin and Albert Lea have really captured what I call the ‘freeway system’ better than any region in our state, and has made transporting goods easier. Transportation is vital to moving the goods.”
Inflation and finding workers were among the top of the list in major concerns for manufacturers with 55% reporting they were concerned with overall inflation and 53% reporting a concern for attracting qualified workers.
The Southern Minnesota Initiative Foundation found that in the region, the main concern remains to be supply chain issues followed by inflation and attracting workers despite the benefits of several major highways. Kill suspects this is due to many of the manufacturers in the region being smaller in nature.
“A third of manufacturers bring in a revenue of a million to a million and a half, and you can see how their confidence has shrunk over the last few years,” he said. “Then those bigger ones, their level of confidence has remained relatively the same. I think a key point here is they’re more affected by the things swirling around us right now that they don’t have control over.”
The manufacturers in the survey were also asked what their company would like to be known for when attracting and hiring new employees. According to the results, 72% reported they wanted to be known for a “great work environment” followed by competitive salary, safe work environment and work-life balance.
“COVID really forced all of us to think about how to have flexibility with two working parents, health care, flexible shifts and the list goes on,” Kill said. “I think the norm is becoming four 10 hour shifts instead of five eights just because you can’t go back and giving people and opportunity to have more family time is important.”
With the mounting concerns directed towards tough times in the economy and fears increasing about an upcoming recession, many of the manufacturers aren’t expecting to see dips in their revenue and profits in the upcoming year.
Additionally, Kill spoke about cyber security which continues to be a low-level concern for most manufacturers despite nearly one out of six have experienced some sort of data breach. Upgrading technology and ongoing employee training are how companies plan to address any potential cyber threat.
Following the presentation, SMIF President/CEO Tim Penny opened up the floor for a question and answer session to hear comments from regional workers in the manufacturing industry. Many who were present could agree with the findings in the survey, especially in terms of material shortages, inflating prices and issues with transportation.
Reach Reporter Emily Kahnke at 507-444-2376. ©Copyright 2022 APG Media of Southern Minnesota. All rights reserved.
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