More Minnesota manufacturers and distributors now say they are “thriving,” and they’re faring better than many of their U.S. peers—although local companies are more concerned about the impact of government regulations and taxation.
That’s according to a new report from McGladrey, LLP, the global accounting and consulting firm. The report is based on survey responses from executives at 920 U.S. manufacturing and distribution firms, including 62 from Minnesota.
Minnesota expressed more confidence and optimism than the nation as a whole, on a number of measures. For example, 42 percent of Minnesota respondents said they are “thriving,” compared to 36 percent nationally. Nationwide, 5 percent of companies said they were “declining”; none of Minnesota’s participants did. Sales grew last year for 74 percent of Minnesota companies, compared to 69 percent nationwide.
The 2014 survey marked an improvement for Minnesota companies: In 2013, 39 percent of participants from the state said they were thriving, and 5 percent said they were declining. But while Minnesota is faring better than the national average, neighboring Wisconsin is even more confident, with 44 percent “thriving.” By contrast, only 33 percent of Illinois participants said they are.
The McGladrey report echoed some of the findings from Twin Cities Business’ latest quarterly economic indicator survey. Similarly, a recent survey from Enterprise Minnesota found that 84 percent of local manufacturing executives were confident in their firms’ future, the highest mark in that survey’s six-year history.
Respondents to all three surveys, however, cited significant concerns about government regulations and taxation — and McGladrey’s report confirmed that Minnesota manufacturers are among the most worried about those issues.
Sixty-five percent of Minnesota respondents said regulations are having a negative impact on growth, among the highest level among states. In fact, three-quarters of Minnesota manufacturers said they believe regulations and taxes will limit growth more than even competition from other companies.
Some more takeaways from the survey about Minnesota manufacturers:
• 67 percent are looking to expand their workforce
• 61 percent of executives said they feel their data is at little or no risk
• 77 percent are planning to increase investments in IT
• 90 percent expect health care costs to rise
• 73 percent cited the Affordable Care Act as their greatest limitation to growth
While Minnesota manufacturers face many of the same challenges as their industry peers, they appear to be handling them differently in some instances. For example, Minnesota manufacturers are seeing a higher return on investment from their marketing strategies, and they have a greater focus on profitable existing customers, according to the report.
For more information about Minnesota’s manufacturing industry, access McGladrey’s full “Minnesota State Benchmark Report.” Find reports about other states here.
A couple of years ago, McGladrey relocated its headquarters from Minneapolis to Chicago, although it maintains a substantial Twin Cities workforce.
This article is reprinted in partnership with Twin Cities Business.