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Minnesota manufacturing: Growth year projected

Manufacturing is on an upward trend in Minnesota.

There were 319,000 manufacturing jobs in Minnesota as of last week, according to the Minnesota Department of Employment and Economic Development. A 2014 study from the department projected jobs would drop from 312,000 jobs in 2014 to 297,500 jobs in 2024, but for now, it appears Minnesota has been adding jobs in the sector.

"We actually have not seen a downturn since 2014," DEED spokesman Monte Hanson said, adding Minnesota's rate of adding jobs year over year is 0.9 percent versus the national average of 0.5 percent. "We are almost double the national rate."

Enterprise Minnesota, a consulting organization that helps manufacturing companies and is chartered to help medium-sized and smaller manufacturers compete and grow, releases an annual report on the state of manufacturing in Minnesota.

"Minnesota's small- and medium-sized manufacturers are incredibly optimistic about the prospects of their companies over the coming year," according to the ninth annual State of Manufacturing survey. The survey uses telephone interviews with over 400 manufacturing executives throughout the state, meetings with 10 focus groups with manufacturing executives. In addition the survey includes three focus groups with college students enrolled in manufacturing programs. New this year, Enterprise Minnesota included two focus groups with high school students who are interested in pursuing manufacturing as a career.

"These findings, coupled with shrinking concerns about the global economy, suggest 2017 will be a year of growth for the state's manufacturing industry," Enterprise Minnesota stated.

"At the time the survey was taken in March, it was clear that Minnesota's manufacturers are optimistic about the economy and their companies' growth potential," said Bob Kill, Enterprise Minnesota president and CEO. "Manufacturers preside over a job-creating engine that feeds the economic vitality of so many communities across the state."

Minnesota manufacturers are confident about the future of the industry. A DEED study released in January stated 90 percent of the respondents expect production levels will increase or stay the same this year. That's compared with 86 percent for 2016.

"Minnesota's manufacturing executives nearly unanimously—94 percent—report they are confident about the financial future of their companies, which is the highest recorded mark in the survey's history and the fourth consecutive year that confidence has climbed," Enterprise Minnesota reported. "Fifty-seven percent said they are very confident, up 14 percent in just one year, and a staggering 30-point improvement over the first survey in 2008.

"For the first time in the survey's history more manufacturers predict economic expansion in the coming year over a flat economy."

By the numbers

About one in nine workers in Minnesota are employed in manufacturing, according to DEED. The industry produced 16 percent of the state's gross domestic product in 2015, making it the second largest industry in the state, the economic department said.

Challenges

The manufacturing sector has faced challenges in the past, particularly during the recession. At the low point in 2010, Minnesota dropped down to 288,300 jobs in the sector, Hanson said.

One challenge that manufacturers could face in the coming years is worker availability, especially as baby boomers begin to retire, according to a report from manufacturing magazine Enterprise Minnesota. A poll conducted by Meeting Street Research, which is cited in the magazine, suggests 68 percent of manufacturing respondents in Minnesota found it difficult to attract qualified candidates to fill vacancies.

For all the nine years of State of Manufacturing survey, health care costs have been the top concern for manufacturers, Enterprise Minnesota reported, which also noted government policies and regulations was a distant second concern.

"The percentage of manufacturers who are having a difficult time finding 'qualified workers' has more than doubled since 2011," Enterprise Minnesota reported. "The issue is even more pronounced in Greater Minnesota, with 75 percent of manufacturers reporting that it is difficult to attract and retain qualified workers compared to 62 percent of metro area manufacturers."

Still, industry and economic leaders stated they felt manufacturing is heading in the right direction.

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