Respondents to an annual Manufacturing Business Conditions Survey conducted by the Minnesota Department of Employment and Economic Development (DEED) and the Federal Reserve Bank of Minneapolis say they expect mostly unchanged or improved conditions in 2020.
“It’s good news for Minnesota that the majority of manufacturers in our state expect stable or improved business conditions in 2020,” said Governor Tim Walz. “Manufacturing is a cornerstone of our state economy, accounting for 14% of Minnesota’s GDP and 40% of all Minnesota jobs, either directly or indirectly.”
Learn about manufacturing conditions across the Ninth Federal Reserve District.
Among the findings of the Minnesota survey:
- 94% of respondents expect employment to remain the same or go up.
- 94% expect production/service levels to remain the same or go up.
- 87% expect numbers of orders to remain the same or go up.
- 82% expect equipment/plant investments to remain the same or go up.
Minnesota manufacturers also reported mostly unchanged or improved conditions in 2019 as compared to conditions in 2018. The random sample survey of 220 Minnesota manufacturers was conducted between November 25, 2019 and January 17, 2020.
This year’s survey, like last year’s, included a question about the effect of U.S. tariffs. Most manufacturers (81%) reported no effect on employment from tariffs, 79% reported no effect on investment, and 74% reported no impact on capital expenditure.
However, 44% of manufacturers reported a negative effect from tariffs on input cost, 42% reported a negative impact on revenue, and 41% reported a negative impact on cost to consumers.
More than 330,000 Minnesotans are employed within the manufacturing sector, which is the state’s second largest industry as measured by gross domestic product.
Manufacturing expectations across the Ninth District
The Federal Reserve Bank of Minneapolis is one of 12 regional Reserve Banks that, with the Board of Governors in Washington, D.C., make up the Federal Reserve System, the nation’s central bank. The Federal Reserve Bank of Minneapolis is responsible for the Ninth Federal Reserve District, which includes Montana, North and South Dakota, Minnesota, northwestern Wisconsin, and the Upper Peninsula of Michigan. The Federal Reserve Bank of Minneapolis participates in setting national monetary policy, supervises numerous banking organizations, and provides a variety of payments services to financial institutions and the U.S. government.