Respondents to an annual Manufacturing Business Conditions Survey conducted by the Minnesota Department of Employment and Economic Development (DEED) and the Federal Reserve Bank of Minneapolis say they expect to see a recovery in 2022.
Compared to 2020, most manufacturers showed recovery in 2021. Sixty-three percent of respondents indicated an increase in the number of orders, and 53% experienced production level growth. Additionally, 38% reported increased productivity.
By 2022, more than 50% of respondents expect wages to increase between 3-5%, and 34% expect benefits to increase between 3-5%. These increases could be related to attracting and retaining talent due to the ongoing worker shortages.
“It’s encouraging to hear Minnesota manufacturers see a light at the end of the tunnel in 2022. Despite setbacks from COVID-19, inflation, and worker shortages, manufacturers are finding ways to keep the momentum going at their job sites,” said DEED Commissioner Steve Grove. “Manufacturing is critically important to Minnesota’s economic success, and many of these companies are hiring right now and offering good-paying, family-sustaining jobs.”
Among the key findings of the survey:
- 92% expect employment levels to remain the same or go up in 2022
- 91% expect production levels to remain the same or go up in 2022
- 90% expect their number of orders to remain the same or go up in 2022
- 80% expect their profits to remain the same or go up in 2022
This year’s survey respondents were asked to provide feedback related to supply chain issues. Most manufacturers expressed they were affected by supply chain problems in a variety of ways. The most common issues include:
- 88% indicated raw materials availability
- 82% indicated domestic supplier issues
- 80% indicated labor issues
- 78% indicated transportation/logistic issues
- 68% indicated overseas supplier issues
- 56% indicated COVID-19 issues
More than 309,000 people work in manufacturing, which makes it the second-largest industry sector by employment in Minnesota. When considering direct and indirect jobs – such as sales, shipping, and professional services – manufacturing supports more than 886,000 jobs or roughly 33% of all the state’s jobs. Statewide, manufacturing accounts for 13% of all private-sector jobs. But in some counties across the state, it accounts for a much greater share of the jobs.
The full survey and methodology are available online.
