Minnesota Manufacturers Expect Mostly Unchanged Conditions in 2023
Compared to 2021, most manufacturers showed improved or unchanged conditions in 2022
January 17, 2023
St. Paul - An annual Manufacturing Business Conditions Survey conducted by the Minnesota Department of Employment and Economic Development (DEED) and the Federal Reserve Bank of Minneapolis found that most Minnesota manufacturers expect mostly unchanged conditions in 2023 – and most saw improved or unchanged conditions in 2022.
Here are some of the key findings of surveyed manufacturers' outlook on 2023:
• 73% expect unchanged exports
• 55% expect the same production levels
• 51% expect constant productivity
• 44% expect unchanged employment levels
• 41% expect the same level of profits
A large percentage of manufacturers expect an increase in wages and benefits for employees, with 60% of respondents expecting wages to increase between 3-5%, while close to 40% anticipate a rise in benefits in the same amount.
"Manufacturing is the backbone of Minnesota's economy. DEED continues to work closely with manufacturers to help them meet their workforce needs and train new and current employees," said DEED Commissioner Steve Grove. "Through DEED's new Automation Loan Participation Program, and our Automation Training Incentive Program, we're also partnering to push cutting-edge solutions to today's productivity challenges."
"This partnership with DEED allowed us to reach 389 manufacturing operations across the Federal Reserve's Ninth District," said Joe Mahon, Regional Outreach Director at the Federal Reserve Bank of Minneapolis. "This provides a vital source of information for us on economic conditions and on the impacts those conditions are having on businesses in the communities we represent."
Survey results show that, compared to 2021, most manufacturers showed improved or unchanged conditions in 2022. Fifty-two percent of respondents indicated an increase in the number of orders and 51% experienced unchanged productivity. Forty-one percent indicated constant levels of employment and production levels, and 36% of respondents reported unchanged profits. Additionally, 45% reported an increase in investment in plant/equipment.
Finding the employees they need remained a challenge for employers, and most reported wages and benefits increasing 3% or more in 2022. A new question on the survey inquired about supply chain bottle neck problems compared to the year before-64% of respondents indicated that problems got worse with labor issues at suppliers and 60% reported transportation/logistic issues.
Manufacturing accounted for $53 billion or 13% of the state's gross domestic product and provided more than 313,000 jobs or 11.3% of statewide employment in 2021. Workers took home $23.4 billion in wages from Minnesota manufacturing jobs in 2021, the second-largest total payroll among private sector industries. Average annual wages for workers in manufacturing are $74,630, 11% higher than across all industries in Minnesota.
A more detailed report on results from this survey completed by 230 Minnesota manufacturing firms, as well as survey methodology, are posted on DEED's website. Survey results for the broader Ninth District region including Minnesota can be found at the Federal Reserve Bank of Minneapolis' website.
DEED is the state's principal economic development agency, promoting business recruitment, expansion and retention, workforce development, international trade and community development. For more details about the agency and its services, visit the DEED website, the JoinUsMn.com website, or follow us on Twitter.