Shortage of workers looms

Minnesota’s manufacturers remain confident in their firms’ futures, as solid revenue, profitability and capital expenditure projections hold steady for the second year in a row.

That’s according to The State of Manufacturing – a major survey research project sponsored by Enterprise Minnesota and partners.

“The value of manufacturing to a healthy economy cannot be stated strongly enough,” said Enterprise Minnesota President and CEO Bob Kill. “We saw manufacturing lead the way through the economic recovery in 2011 and the 2012 State of Manufacturing poll results validate that. Through innovation and investment, Minnesota manufacturers are growing, and they are adding high quality jobs.”

Kevin Kopischke, president of the Alexandria Area Economic Development Commission, said the survey shows that the area continues to recover from the economic downturn of the last few years.

“I think that all in all, the news is positive,” Kopischke said in an interview with the Echo Press. “From our perspective, as a rural regional center community that has a reputation as being one of the strongest manufacturing regions in the state, things are taking off.”

Kopischke, who is also president of the Alexandria Technical Community College (ATCC), said the college has been busy partnering with local firms, working with the local K-12 education system and getting young people informed about the career opportunities that are available in the area.

“The picture is positive,” he said. “I think it’s safe to say we’ve came out of the depression.”

Manufacturing jobs in the area offer good pay, typically starting at $13 to $16 an hour, Kopischke said. “After a year of employment, they also offer raises and benefit plans,” he added.

The ATCC, he said, is trying to keep its tuition rates low so more students will get the kind of high-tech training the manufacturing jobs demand. Next year’s tuition increase will be less than 4 percent, he said.

A key factor in keeping higher education affordable is support from the Legislature, Kopischke said. Right now, the state is providing 45 percent less funding per student than it did in 2000, he said.

“That’s a significant disinvestment from the state Legislature,” he said.

Though it ranked fourth on manufacturing executives’ collective list of concerns, worry over finding qualified workers has doubled over the past year. Thirty-one percent of executives say this issue is a concern for their firm, up from 14 percent in 2011. Firms of larger size and revenue are most likely to rate this as a concern.

Another worry that the survey brought out was health care costs. It remained the top concern for the fourth year in a row. Almost seven out of 10 manufacturing executives (68 percent) said the cost of health care coverage is a concern for their firm.

From a financial perspective, 82 percent of executives say they are confident about the future of their firms. This high confidence level is remarkably consistent with data from 2011’s survey, and spreads across companies of all sizes, locations and revenues.

However, there are some signs that last year’s optimism has subsided a bit.

When asked whether they anticipate an economic expansion, a flat economy or a recession, 32 percent of executives say they expect an economic expansion, down from 40 percent in 2011.

Meanwhile, the percentage of executives who anticipate a flat economy has increased from 49 percent in 2011 to 55 percent in 2012.

Projections on revenues, profitability, and capital expenditures are also slightly less rosy now than they were a year ago. Where 51 percent of executives anticipated an uptick in gross revenues and 32 anticipated an increase in capital expenditures in 2011, 47 percent anticipate increased gross revenues and 27 percent expect an increase in capital expenditures in 2012.

The starkest contrast is seen in profitability projections. While 39 percent of executives expected their firm’s profitability to increase in 2011, only 31 percent expect it to increase in 2012.

The full results of the State of Manufacturing were revealed last month at a series of briefings with manufacturers, business leaders, and policymakers throughout Minnesota, including in Alexandria.

To see the full results, visit www.enterpriseminnesota.org.

Tags: local news, news, manufacturing, money, updates