Last month, our CEO Gregg Elliott was featured at the annual Twin Cities Enterprise Minnesota State of Manufacturing event, where he shared his thoughts on the current climate of manufacturing in Minnesota and what may be in store for manufacturers across the state in 2025.
This year, Enterprise Minnesota surveyed 400 Minnesota manufacturing executives from mid-August through mid-September, including CEOs, CFOs, COOs, presidents, vice presidents, and managing officers. The major theme of this year’s survey results? Dread.
Minnesota Manufacturers Are Dreading the Future of Manufacturing
The survey found that 83 percent of respondents believe Minnesota’s economy was either flat (42 percent) or in a recession (41 percent) in 2024. Federal Bureau of Economic Analysis data released in September 2024 that showed Minnesota’s economy grew 1.3 percent in Q2, ranking Minnesota 48 out of 50 states in economic performance for that quarter (the latest data available at the time of this publication).
Furthermore, more than half of respondents shared that they felt the business climate in Minnesota has gotten worse. Eighty percent of manufacturers said they were confident about the future of their company, the lowest level of confidence since the Great Recession. Confidence is lowest among the state’s smaller manufacturers doing less than $1 million in revenue.
Another bellwether of manufacturer attitudes about the state of manufacturing is gross revenue projections. In 2024, 40 percent of manufacturers expected a decrease in growth revenue rather than an increase. This expectation has cropped up twice before: during the Great Recession and six months into the COVID-19 pandemic.
What’s Causing All This Dread?
The survey identified several pain points that are causing the bearish attitude toward the future of Minnesota manufacturing. Concerns over inflation and health care costs grew over the last year, with inflation surpassing health care costs as manufacturers’ top concern in 2024. Attracting and retaining a qualified workforce remained an issue, too. Manufacturers also cited the state’s unfavorable business climate as a pain point.
The survey found that fewer manufacturers were hiring in 2024, continuing a trend from 2023 that reflects the state’s low unemployment rate and job market that favors workers. Seventy-five percent of manufacturers who were hiring reported that it was difficult to find the workers they need.
The State of Manufacturing at Seacole
Seacole’s CEO Gregg Elliott was featured via video interview at the State of Manufacturing event. During the interview, Gregg made a few observations about the state of Seacole’s manufacturing and our plans for 2025.
Potential Threats in 2025
Seacole “has seen a very strong market these last couple of years in the industrial segment, but we see that slowing just a bit [in 2025]. . . . We’re seeing our customers readjust, they’re buying a little bit less, they’re keeping less inventory and reducing their headcount a bit, so we’re seeing that softening in the industrial space.”
Overall, “it’s very difficult to have customers stay in [Minnesota’s high-tax] environment, and that’s why I think a number of our customers have left Minnesota.”
In regard to our workforce, “there’s a whole generation of people who are getting ready to retire, and it’s going to be very difficult to replace them because there isn’t a generation backing them up and backfilling to step into those positions. So it’s really a challenge for us to find that kind of talent and experience. We’re finding we have to bring people in that don’t have that background and train them. So it’s a different way of looking a retaining people by training them.”
Potential Opportunities in 2025
On the other hand, “parts of our business are not so soft, and they’re growing and expanding pretty quickly. For example, our agricultural business, when you have cutting-edge technology in agriculture like we do, there’s great interest, and we can hardly keep up with all of the interest.”
Seacole’s Plan for Growth in 2025
“We have some pretty aggressive growth plans or 2025, and no matter what the economy does, we’re going to adjust and take advantage of opportunities. Because we’re so diverse, we’re going to concentrate on the areas that are growing and expanding and maybe fill in the holes for things that are not doing so well.”
While manufacturers statewide are fearful for the future of manufacturing, Seacole’s diverse products and talented team provide plenty of reasons for us to feel confident moving into 2025 and beyond. For more information on Seacole’s participation in the State of Manufacturing survey, reach out to Seacole today.
