Minnesota manufacturers are upbeat about the economy, with about 90 percent expecting production to increase or stay the same in 2017, according to a joint survey released Monday by the state and the Federal Reserve Bank of Minneapolis.
An overwhelming majority of the 262 factory heads surveyed expect new product orders and exports to spike this year. If such predictions for improved conditions prove correct, that could stabilize the sector after what was largely considered a rocky 2016.
Last year, most Minnesota-based multinational producers battled a strong U.S. dollar plus severe downturns in the oil, agricultural equipment, iron and steel sectors.
Going forward, more than 85 percent of surveyed manufacturers in the state told Federal Reserve officials that they expect better days ahead, which could buoy employment for the sector. Some 91 percent of those surveyed said manufacturing employment should increase this year.
"With manufacturing accounting for more than 315,000 jobs in Minnesota, the industry's positive outlook is good news," said Shawntera Hardy, commissioner of the Minnesota Department of Employment and Economic Development. "These results indicate that manufacturing in Minnesota is headed in the right direction, with the vast majority of employers expected to retain or increase the number of jobs in this critical industry."
The survey also found that 80 percent of those surveyed expect profits to rise, while a respective 93 and 92 percent expect productivity and prices to improve or stay the same.
Most factory heads said they experienced higher health care costs last year as a result of the federal Affordable Care Act, which mandated that all Americans have access to health care regardless of preexisting medical conditions.
Despite higher costs that ate into manufacturing profits, most of those surveyed said they would continue investing in new facilities and equipment this year. About 61 to 72 percent also told surveyors that elevated health care costs did cause them to increase product prices or change their hiring, wages, outsourcing or automation.
Survey results were in line with recent manufacturing reports issued by economists at Creighton University, the National Association of Manufacturers and the Institute for Supply Management. Those reports, which were issued last week, signaled that U.S. and Midwest manufacturers are hopeful that President-elect Donald Trump could slash regulations and taxes. However, they remain leery that Trump could potentially disrupt trade.