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Report finds optimism, caution among state's manufacturers

Bob Kill, president and CEO of Enterprise Minnesota, presents a report Wednesday at the MinnWest Technology campus on the results of the fifth annual State of Manufacturing survey. Tribune photo by Ron Adams

WILLMAR -- Minnesota's manufacturers are tempering their outlook this year, expressing confidence in the future but less optimism about the economy and their own ability to increase their revenue.

The findings are contained in a new statewide survey, the fifth annual "State of Manufacturing" report commissioned by Enterprise Minnesota to gauge what the state's manufacturers are saying about the economy, public policy, workforce recruitment and more.

On the whole, manufacturers are more hopeful than they were a few years ago as they emerged from the recession, said Bob Kill, chief executive of Enterprise Minnesota.

But they're also cautious about the potential impact of health care reform and global economic woes, he said.

This year's report contains a foggier forecast for manufacturing than in previous years, he said. "I think it reflects an environment that has a lot of outside uncertainty."

The report was presented Wednesday in Willmar at a gathering hosted by the MinnWest Technology Campus, Southwest Initiative Foundation and the Kandiyohi County and City of Willmar Economic Development Commission. Close to 50 people showed up to hear and discuss the findings.

Surveyors conducted phone interviews this past February with 400 manufacturing executives across the state. Twenty focus groups also were hosted to dig deeper into manufacturing's worries, challenges and success stories.

Among the survey findings:

- Nearly half of the respondents don't think Minnesota is headed in the right direction, a percentage that has remained virtually the same for three years.

- More than half think the economy this year will stay flat or decline into a recession.

- Despite this lack of optimism, eight out of 10 feel hopeful about their own company's future.

- The cost of health care coverage is the No. 1 concern of Minnesota manufacturing executives, followed by political uncertainty.

- Six out of 10 manufacturers say it's difficult to attract qualified workers, and one out of three believe a worker shortage will impact their bottom line in the coming year.

One of the brightest spots, said Kill, is a growing awareness of the potential for careers in manufacturing.

College and training courses that were half-empty only a few years ago are now often full, he said.

New partnerships also have been emerging between education and manufacturing, said Kill. "We've got to work together. ... The public-private collaboration should not be underestimated."

The leading reason for the annual survey is to bring more visibility to manufacturing at the local, state and even federal level, he said. Results are shared not only at regional meetings across the state but with Minnesota's congressional delegation as well.

With 7,400 manufacturers in Minnesota, the industry accounts for 13 percent of jobs and 16 percent of wages in the state. For each manufacturing job, an additional 1.9 supporting jobs are generated.

Manufacturers should open their doors and invite people to come in and see what they're doing, Kill said. "We ask for everyone in this room to push it one step further."

Anne Polta

Anne Polta covers health care, business/economic development and general assignment. Her HealthBeat blog can be found at Follow her on Twitter at @AnnePolta.

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