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Manufacturing survey highlights

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Manufacturing survey highlights
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Enterprise Minnesota survey highlights

Growth: Manufacturing executives are slightly more optimistic about the revenue projections of their own companies than they were in 2013, with 45 percent expecting an increase in gross revenue, up from 41 percent last year.


In terms of profitability projections, 35 percent of respondents anticipate an increase in profits, up from 32 percent in 2013. Overwhelmingly (76 percent) manufacturers said that this growth would come from new customers. The number of manufacturers expecting an increase in capital expenditures remains flat at 27 percent.

Worker shortage: Virtually all (97 percent) of Minnesota’s manufacturers expect to maintain or grow their workforce in the year ahead. About a third (30 percent) expect their firms to grow, split

proportionally between companies in the Twin Cities and greater Minnesota.

The “ability to attract and retain qualified workers” continues to grow as an increasingly chronic concern for manufacturers. Two-thirds (67 percent) say it is difficult to attract qualified applicants to fill vacancies, the highest mark in the survey’s history. This problem is especially pronounced in greater Minnesota (75 percent), which is a 33-point jump from just four years ago and notably higher than the metro area (61 percent).

Companies with more than $5 million in revenue are feeling this problem even more acutely, with 82 percent reporting trouble finding qualified applicants.

Wages: A majority of executives expect to increase wages for the first time since the recession. Fifty-four percent said that on average, wages over the last two years have gone up, an 11-point increase from 2013.

A whopping 62 percent expect wages to increase in 2014, a 14-point upsurge from those polled in 2013. Greater Minnesota firms are more likely to say their wages are going up (66 percent) than those in the metro.

A quarter (25 percent) of the manufacturers surveyed predicted they would “invest more in

employee development as a percent of payroll” in 2014, seven percent higher than last year.

This interest is greatest (42 percent) among companies with more than $5 million in revenue and/or more than 50 employees.

Health care: This is the sixth year in a row that health care costs were listed as the top concern of

manufacturing executives at 59 percent, down from 67 percent in 2013. Companies with more than $5 million in revenue were the most anxious about healthcare costs at 66 percent followed closely by companies in greater Minnesota at 64 percent. Manufacturers also continue to state that health care is the dominant factor in recruiting the best talent over salary and wage expectations by almost 20 points (51 percent to 32 percent). The cost of health care coverage was also named the most important factor (59 percent) when it comes to attracting and retaining qualified workers.

Trade: Nearly one quarter (23 percent) of manufacturers said they ship 11 percent or more of their products internationally.

This represents an 11-point increase over last year and signifies the highest level the survey reported in six years. The top potential market for future business remains Canada at 17 percent, while Europe moves past China into the number two spot at 13 percent.

“Home-sourcing” or “reshoring,” the trend of original equipment manufacturers (OEMs) bringing their supplier work back from foreign sources, has benefitted 24 percent of Minnesota manufacturers statewide, 34 percent for companies with more than $5 million in revenue.

Of those benefitting from home-sourcing, 31 percent said that “shorter lead times” were the primary reason the supply-chain relationships changed.

The value of strategic planning: Companies that engage in formal programs regarding marketing, strategic planning and quality management processes exhibited sharply better revenues and profitability than those that don’t. Roughly half the companies surveyed engage in formal processes for marketing (48 percent) or strategic planning (50 percent).

About 37 percent of companies have a formal quality management system. Companies that have a formal marketing process expect an increase in gross revenues by a 2-to-1 margin (60 percent-31 percent) over those that don’t. These companies also expect better profitability (46 percent-26 percent).

Source: Enterprise Minnesota

Denton (Denny) Newman Jr.
I've worked at the Brainerd Dispatch with various duties since Dec. 7, 1983. Starting off as an Ad Designer and currently Director of Audience Development. The Dispatch has been an interesting and challenging place to work. I'm fortunate to have made many friends, both co-workers and customers.
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