POLL: Manufacturers Anxious About Recent Legislative Actions

The 2023 State of Manufacturing^® survey reveals little confidence in economic growth and anxiety over the impact of new state laws.

MINNEAPOLIS, Nov. 9, 2023 /PRNewswire/ -- Manufacturers surveyed by the 2023 edition of the State of Manufacturing® survey expressed deep anxiety about their ability to cope with a sweeping series of employment laws enacted during the last legislative session. These changes include expanded paid leave requirements; a new employer-funded paid leave program; and legalization of cannabis, along with new workplace drug testing policies.

Complete survey results, analysis and cross-tabulations are available at www.enterpriseminnesota.org/state-of-manufacturing/.

The poll, released today, marks the 15^th year that Enterprise Minnesota has sponsored the survey. Meeting Street Insights, a nationally recognized polling company, interviewed a random sample of 400 manufacturing executives in August and September, yielding a margin of error of +/- 4.9%. The research also included 12 focus groups held throughout the state.

A wide majority (72 percent) of respondents are very concerned about the costs associated with the new payroll tax, split between employer and employee, to fund the paid leave program. Add in 68 percent who are very concerned about new requirements for paid sick time, plus 60 percent who are very concerned about cannabis in the workplace and limits on being able to regulate it. Combined, this makes for a highly unsettled sector.

Manufacturers believe Minnesota is becoming a less attractive business climate due to these new regulations. In total, 59 percent reported that the new legislation makes the state less attractive for business, including 42 percent who say it is much less attractive.

Pollster Rob Autry, who has conducted the poll for 15 years, said that for the first time, the current poll showed how manufacturers are concerned by the impact the legislature can have on their businesses. "We haven't seen that level of anxiety and concerned about what's going on in St. Paul traditionally," he said.

These changes are prompting mixed reactions. In focus groups, some manufacturers shared that they are creating jobs in other states with better business climates or waiting on making new hires. Others note the difficulty of moving an entire manufacturing operation and dozens of employees to a new state, making leaders resigned to the changes, says Bob Kill, president & CEO of Enterprise Minnesota.

"They are still trying to figure out what these new regulations mean to them. It adds more uncertainty," in a time where conditions are already difficult coming off of struggles with hiring, high inflation, and supply chain issues, Kill says. "It's really a huge burden for the smallest manufacturers."

The survey revealed other challenges and opportunities facing Minnesota's small- and medium-sized manufacturing companies:

• 73% of manufacturing executives project a flat economy or recession in 2024
• Overall, 50% of respondents say Minnesota's business climate has gotten worse
• Attracting qualified workers, the cost of health care coverage, and inflation remain top concerns

Looking ahead to 2024, manufacturers' fears of a recession have dropped 23%, from 43% worried about it in 2022 to 33% this year, and the biggest challenges that could put a damper on growth are attracting and retaining a qualified workforce (39%), inflation (32%), and increases in costs of materials needed to make products (31%).

Enterprise Minnesota President & CEO Bob Kill is available for interviews. Please contact Robert Lodge to schedule an interview: [email protected] or 612-455-4213.

Enterprise Minnesota is a business consulting organization that works exclusively with manufacturers in Minnesota to help them compete and grow profitably. It is the official Manufacturing Extension Partnership (MEP) center for the state of Minnesota. www.enterpriseminnesota.org

SOURCE Enterprise Minnesota