How Minnesota’s manufacturing executives feel about the year ahead

Manufacturing executives in Minnesota are optimistic about their revenue prospects in 2018, but they’re also concerned about a workforce shortage that remains a major hurdle for industries across the country.

“Our first quarter bookings are stronger than in 2016 and 2017,” said Sarah Richards, president and CEO of Jones Metal, a metal fabrication company in Mankato. “We also have some businesses that should be coming in the second and third quarters. So I think we’re going to see a growth here.”

Indeed, that positive outlook is widespread among business leaders in the industry — and it stems from the recent economic improvement the U.S. has seen, as well as the growing demand for construction and agricultural equipment.

Another reason that manufacturers are optimistic about 2018, said Bob Kill, president of Enterprise Minnesota, a consulting group focused on manufacturering, is because investors are pouring money into the industry as they see positive economic prospects ahead. “People are feeling energized,” Kill noted. “They feel pretty strong about their businesses. If you think about the mining industry, which has been down, is coming back pretty strong.”

Though more manufacturing executives in Minnesota may be optimistic about the industry’s prospect, their general positive attitude towards the industry has been on an upward trajectory for several years now.

In 2013, for example, 82 percent of executives in the industry said they had a “total” confidence about their companies’ financial prospects in that year, according to a report by Enterprise Minnesota. In 2015, that number climbed to 89 percent; and in 2017, it reached 94 percent.  

This year, like Richards, St. Cloud Window CEO Casey Mahon said that he’s anticipating to receive more contracts than the company received last year. “I’m expecting a wonderful 2018,” Mahon said. “We’re off to a good start for the year, and we’re carrying over a good amount of businesses from last year into the new year. So we expect a good year.”

Combating workforce shortage  

The picture for manufacturing is not entirely rosy, though. Richards and Mahon, like many other leaders in the field, are facing a big challenge that has remained persistent since the country emerged from the Great Recession: a dearth of workers.

And it’s not just skilled workers who are difficult to come by, said Richards. Unskilled workers aren’t always accessible as well, even when Jones Metal and other employers are sometimes willing to invest in new employees by providing them with months-long training opportunities that get them ready for the work.

Which leads to the question: What are the employers acutally doing to attract and retain workers?

They’re doing several things, they say. Many are raising wages, expanding their benefits and making their workforce more attractive to potential candidates. Last year, for example, St. Cloud Windows pushed up wages for floor employees in an effort to keep pace with other companies in the industry.  

Mohan said that his firm has also been offering competitive benefits — including paid personal time off as well as medical, dental and life insurance — and making its workplace an inviting environment. “I think we’re doing as much as everybody is doing to attract and retain employees,” Mahon said.

Like St. Cloud Window, many companies are investing in programs that promote careers in manufacturing among high school students. Executives in the industry have been supporting, encouraging and mentoring students to explore robotics, welding and other coveted employment skills in the industry, often by funding manufacturing-related programs, providing apprenticeship opportunities to students and inviting educators from high schools and colleges to advisory council meetings — in hopes of creating a pipeline classrooms to the workforce.

“The message we’re trying to get to youngsters who are still in high school is that manufacturing is a good place to work,” Mahon said. “You can make a good lifelong career in manufacturing if you develop the skills that you’ll need to do the work.”