Survey: COVID impact on manufacturing may be worse this year
St. Cloud Times
ST. CLOUD — The two most pressing concerns of Minnesota’s manufacturers won’t surprise you: supply chains and attracting qualified workers. You’ve probably heard about them in the news, over the dinner table and just about everywhere.
The 2021 State of Manufacturing survey results were released this month, detailing insights on how manufacturers are recovering amid the pandemic, how manufacturing executives feel about the economy and what’s keeping them up at night.
Opinion research firm Meeting Street Insights conducts the survey for Enterprise Minnesota annually, and this is the 13th year the survey has been administered.
That alone was its own challenge, as manufacturers seemed to be busier than ever this year, Meeting Street Insights founder Rob Autry said during the release of the survey. Over the last 12 years, most interviews were done during the business day. Last year, interviewers spoke with manufacturing execs outside of business hours three times.
This year, 1/3 of the interviews were conducted during non-business hours, like evenings or weekends, Autry said.
He said survey results indicated that COVID-19’s impact on manufacturers was as significant — if not more significant — than it was last year, the St. Cloud Times reported.
Supply chains and attracting qualified workers, currently nationwide buzzwords as employers struggle with a labor shortage and supplies sit in shipping containers outside swamped U.S. ports, were at the top of manufacturers’ lists of concerns, Autry said.
This is the first year the survey asked Minnesota’s manufacturers about their concern regarding supply chains, Autry said, and 67% of manufacturers ranked it between 8-10 on a scale from 1-10 (with 10 indicating the highest concern).
Just behind that, 61% of manufacturers similarly ranked attracting qualified workers as a high concern. That’s a 25-point increase from last year’s survey, Autry said.
Robots and employees work together in the Rotochopper manufacturing facility Tuesday, April 13, 2021, in St. Martin.
According to the survey, 62% of these manufacturers are currently hiring for open positions. Of those with open positions, 87% said it is either somewhat difficult or very difficult to attract qualified candidates to manufacturers like themselves. And 50% of manufacturers listed hiring new employees as one of the two or three most important drivers of their company’s future growth, just ahead of increasing material costs for products.
These workforce challenges are felt more keenly at larger companies, Autry said. Among manufacturers with over 50 employees, 84% said they were hiring and it was difficult to find the workers they need, according to Autry. 67% said it was very difficult. Autry said this is “pretty dramatic.”
Conversely, smaller manufacturers are the ones who are feeling even more of the impact of COVID-19 this year, Autry said.
More manufacturers than ever, 46%, believe the business climate in Minnesota has deteriorated in the last five years. COVID-19 has clearly had an impact on this opinion, he said.
“Over the five years we’ve been asking in this survey, that is by far the highest level we’ve seen,” Autry said. “That was 11 points higher than it was a year ago.”
This year, 94% of manufacturers believed COVID-19 had a modest or major impact on Minnesota’s economy and business climate. (That’s up 2% from last year.) The other answer options were minor impact or no impact.
Though regionally, there’s not much difference in how manufacturers feel on this point, 78% of smaller manufacturers — those with less than $1 million in revenue — felt COVID-19 was having a major impact on the state’s economy and business climate. That’s an increase from last year, while in comparison, companies with more than $5 million in revenue were less concerned about this than last year (61% felt the pandemic has had a major impact on the state’s economy and business climate).
“Now you have this significant gap between those who make less than a million and those who make $5 million plus,” Autry said.
Still, manufacturers responded that they are feeling confident in the future of their companies from a financial perspective. This confidence hasn’t rebounded to pre-COVID-19 levels, but 87% of manufacturers surveyed said they felt confident about the future of their company from a financial perspective.
“These are still exceedingly high numbers in terms of confidence,” Autry said.