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IndustryNet Blog

Inside Minnesota's manufacturing resurgence

Posted by IndustryNet on Friday, March 16, 2018

proto labs minnesotaMinnesota’s manufacturing sector is going strong, according to new data collected by IndustryNet. The state’s industrial employment edged up for a sixth straight year in 2017, adding 3,285 industrial jobs.

This is more than double the increase reported in 2016, adding to the nearly 20,000 jobs the state had gained since October 2011.

Minnesota’s highly skilled workforce remains a major draw for manufacturers as industrial production evolves toward high-tech and innovation-driven enterprises.

In addition, an abundance of capital funding and robust economy have helped the state’s manufacturers thrive, reflecting similar gains in many Midwestern states like Wisconsin and Indiana. Yet, challenges persist.

This article will explore how Minnesota manufacturing has evolved over the years, examining city, county, regional, and historical data collected by IndustryNet. We’ll also take a look at some of the challenges faced by Minnesota manufacturers, and provide some insight into the state’s outlook.

The year in review

Manufacturing employment in Minnesota edged up one percent between November 2016 and November 2017, a gain of 3,285 jobs.

This past year’s employment gain was overwhelmingly led by the state’s massive food processing sector, which grew by 1.2% and ranks as the state’s largest sector by number of industrial jobs.

Strength was seen across multiple industries in Minnesota, and included job gains in chemicals, up 4.3%; furniture/fixtures, up 2.6%; transportation equipment, up 2.1%; and stone/clay/glass, up 1.6%.

Industrial employment in Minneapolis inched up a half percent; while strong gains were seen in Bloomington and Rochester.

Looking aheadmachine shop worker with blue shirt

A number of Minnesota industrial companies expanded their operations over the year, including medical device maker Pepin Manufacturing in Wabasha; farm equipment manufacturer Geringhoff in St. Cloud; contract manufacturer MDI in Hibbing; and L & M Radiator, also in Hibbing.

A few new plant openings were also announced. C6 Composites LLC opened a new carbon composite facility in Roseville, while Valley Natural Foods broke ground on a meat processing plant in Northfield.

Most recently, Brooklyn Park’s Protolabs expanded into a new facility, furthering its thriving prototyping operation; Intricon ramped up production at its medical wearables plant in Arden Hills.

AGCO Jackson was recently named one of the nation’s “Best Plants” by IndustryWeek in March 2018 for, among other reasons, the establishment’s embrace of technology. Hundreds of the plant’s workers, for instance, wear Google Glass in order to help streamline operations.

Why Minnesota’s industrial sector continues to grow

It’s not surprising that Minnesota continues to add jobs to its manufacturing sector, given its stronghold in traditional sectors like food processing sector and its emphasis on emerging technologies. The state continues to invest heavily in innovative enterprises, drawing from its highly-educated workforce.

Minnesota manufacturers also have access to an abundance of capital and solid infrastructure. The state boasts a number of business incentives, including R&D tax credits; “angel” tax credits; and a SEED capital investment program, making it easier for start-ups and new manufacturers to set up shop.

Yet, like many states, Minnesota’s industrial economy is poised for some major changes in the years ahead as its workforce ages and as new economic policy shifts take hold.

Next we will take a look at some of the economic factors that are poised to shape Minnesota’s industrial sector in the years ahead.

firmvacancies640_0Workforce benefits – and woes

Minnesota’s number one strength remains its highly-educated workforce, which has gone a long way in helping the state’s medical device sector thrive and innovate.

Minnesota's workforce is so strong, in fact, that the state now ranks 3rd in the nation for business climate, and its workers ranked as the second-most educated.

Yet, a closer look reveals that Minnesota is currently suffering from a growing skills gap.

Enterprise Minnesota recently conducted its highly-cited “State of Manufacturing” report for 2017, showing optimism among the state’s manufacturers to be at an all-time high.

However, the study also reveals a growing struggle among these firms to meet the hiring demands of their growing operations (graphic from Enterprise Minnesota).

The state’s population is aging rapidly, and while many manufacturers have located their operations in the North Star State due to its top-notch workforce, the number of available workers have dwindled. Retirements are affecting about 30% of the state’s manufacturers, and according to the survey, 42% of manufacturers said difficulty in finding skilled workers was due to availability or interest of applicants.

Consolidation also tends to put a dent in manufacturing employment, evidenced by refrigerator maker Electrolux’s recent announcement that it will shutter its St. Cloud Frigidaire plant, consolidating operations at its facility in South Carolina. This will result in the loss of 900 jobs for the state.

Tax reform, tariffs and Trump

Minnesota accounts for 80% of the nation’s iron mining jobs, and just last July United Taconite established a new iron pellet plant in Forbes. The recent tariffs enacted by the Trump administration on imported steel and aluminum is set to have a major impact on Minnesota manufacturers.

Northeast Minnesota’s iron mining operations are sure to benefit, yet the tariffs could potentially harm industries that rely on imported metals, including many of the tech-driven operations that have spurred Minnesota’s growth since the recession. This is especially true for the state’s all-important medical devices sector.trump_ohio

The Trump administration’s recently enacted tax reform is expected to have a beneficial impact on the nation’s manufacturers, and recent economic reports continue to paint an optimistic picture of U.S. manufacturing growth.

However, the sweeping tax reform is also expected to cause a ballooning deficit, and it remains to be seen the degree to which this might affect the nation’s manufacturers.

Next, we’ll take a look at the rise of Minnesota’s manufacturing sector in the years following the recession, highlighting some of the major developments tracked by IndustryNet.

Inside Minnesota’s manufacturing recovery

2011-2012

Minnesota was hit hard during the recession, shedding 43,000 jobs between 2007 and 2011, representing a 9% decline in the state’s workforce.

Between 2011 and 2012, however, Minnesota’s industrial sector began to climb back, gaining 1,300 jobs – its first year of gains since before the recession hit. Job numbers began to inch up across numerous sectors and were strongest in furniture/fixtures; rubber/plastics; fabricated metals; chemicals; and primary metals.

That year was a great one for expansions in the North Star State. Polaris expanded its R&D facility in Wyoming, and AGCO expanded its Jackson plant. Other expansion included countertop-maker Cambira in LeSeur; SICK, Inc. in Minneapolis; Quality Ingredients Corp in Burnsville; and Jackson-based TSE facility.

We also saw several new plant openings, including German manufacturer Gerinhoff, which unveiled plans to establish a facility in St. Cloud, and Australia-based fish processor K&C Fisheries, which announced it would build its first U.S. plant in Wabasha. The town of Faribault received some good news when the previously-shuttered Faribault Woolen Mills announced it would restart blanket production in Faribault.

2012-2013100000203toolingcloseup

In this year, Minnesota gained double the number of manufacturing jobs than it had in the previous year. The state added nearly 4,000 jobs, or about one percent in its second straight year of gains.

A number of key sectors reported significant gains in employment, including furniture/fixtures, which shot up nearly 10%. Fabricated metals; transportation equipment; and electronics also posted large increases.

Manufacturers continued to announce new expansions, with Chart Industries unveiling plans to expand its liquid natural gas equipment facility in New Prague; WFSI announcing the same for its welding plant in Sauk Rapids; and Lund Boat Co. making plans to expand its New York Mills facility.

The rise of “green” technology began to give way to a number of innovative enterprises, including Green Plains Renewable Energy’s ethanol plant in Fairmont; and electrochromic “smart glass” maker SageGlass in Faribault. Another major announcement that year was Baxter International’s purchase of a new manufacturing facility in Brooklyn Park.

2013-2014

In its third straight year of gains, the North Star State recovered nearly half of the jobs it had lost during the recession. Industrial employment shot up by 8,100 jobs, representing a 1.7% increase.

The state’s remarkable gain was led by the food processing sector, which rose one percent, and stands as Minnesota’s largest sector by manufacturing employment, accounting for 15% of the state’s industrial workforce.

Among other industries picking up speed were medical devices, which surged nearly 9%; as well as furniture/fixtures; lumber/wood; stone/clay/glass; and fabricated metals.

Bright spots for Minnesota’s industrial sector included the establishment of injection molding company Proto Labs in Plymouth, while Itek Energy unveiled plans to establish a solar panel facility in Minneapolis.

In addition, Pearson Candy Company in St. Paul ramped up production of its “Bit of Honey” candy bar, while other expansion were reported at Rotochopper in St. Martin; Daikin Applied in Owatonna; Park Industries in St. Cloud; medical device maker Juno Pacific in Anoka; and Menasha Packaging in Lakeville.

2014-2015

Minnesota’s food processing industry continued to expand in this year, adding 1.6% to it workforce and helping the state to add jobs for a fourth straight year. Employment increase were slower in this year, edging up by 3,700 workers.

The state’s textile manufacturing sector also added jobs, up 12%; while electronics; fabricated metals; chemicals; and transportation equipment all posted significant gains.

Plant expansions continued to accelerate, and included Uponor North America in Apple Valley; Arden Hills-based aspectLED; Duluth-based Advanced Materials Solutions; and Stern Rubber in Staples.

The establishment of Wells Food Processing’s meat plant in Wells helped the state’s food products sector, while the opening of Lakeville’s SSB Manufacturing’s mattress plant helped reinvigorate Minnesota’s textile industry.

We also saw some significant gains in Minnesota’s major industrial cities, with Minneapolis posting a 2.6% increase, while manufacturing jobs in St. Paul edged up 1%. Bloomington and Rochester each saw gains of more than 3%.

00000139HighTechManufacturing2015-2016

Manufacturing job gains dwindled to less than a half percent in this year, as a strong dollar and global competition continued to put a dent in growth.

Food processing was once again the star of this year’s survey, with that sector growing by 1.6%. Textiles/apparel continued to grow, as did transportation equipment. For the most part, however, Minnesota’s industrial sectors remained steady, posting little change in employment.

Plant opening were also fewer, and included the establishment of pillow manufacturer MyPillow’s manufacturing facility in Shakopee, and C6 Composites LLC, which broke ground on a new plant in Roseville.

The town of Keetac welcomed the reopening of U.S. Steel’s taconite pellet plant, and Northfield saw the establishment of Valley Natural Foods’ new processing facility.

In a reversal of the previous year, a number of Minnesota cities reported slight losses, with jobs down in Bloomington; St. Paul; and Eden Prairie. Manufacturing jobs were little changed in Minneapolis, holding steady at 56,000 workers.

Next we’ll break down the numbers for Minnesota, taking a look at some of the top industries, cities and manufacturing companies for the state right now.

By the numbers

Leading Minnesota Industries by Employment:

15% Food and kindred products
15% Industrial machinery and equipment
10% Instruments and related products
10% Printing and publishing
10% Fabricated metal products

Minnesota’s largest industrial companies by number of jobs

3M Co. (St. Paul) - 10,100 employees
Thomson Reuters, Core Publishing Solutions (Eagan) - 6,700 employees
IBM Corp. (Rochester) - 5,300 employees
Boston Scientific Corp. (Maple Grove) - 4,500 employees
Cargill, Inc. (Wayzata) - 3,500 employees

Top Minnesota counties for industrial jobs

Hennepin - 152,271 jobs
Ramsey - 59,412  jobs
Dakota - 34,625  jobs
Anoka - 20,130  jobs
Stearns - 18,764  jobs

Top Minnesota cities for industrial jobs

Minneapolis - 65,092  jobs
St. Paul - 42,891  jobs
Bloomington - 13,029  jobs
Eden Prairie - 12,828  jobs
Rochester - 12,093  jobs

About this data:industrynetGEAR

IndustryNet’s team of more than 80 researchers scours hundreds of sources on-and-offline to zero in on every manufacturer in the U.S. Each manufacturer is contacted multiple times annually to ensure its information remains up-to-date and complete.

Our state-by-state industrial employment surveys are based on this data, allowing us to compare jobs counts in a given industry, state, region or city from year to year.

For more information on Minnesota manufacturing companies

To access detailed profiles of Minnesota’s 9,100 industrial companies and their 28,400 executives, learn more about IndustryNet’s database subscription.

Or, to connect with industrial suppliers in Minnesota and across the U.S. start your free search on IndustryNet. IndustryNet allows users to search and source more than ten thousand types of products, parts, supplies, and services for free. IndustryNet® lists every U.S. manufacturer plus thousands of wholesalers & distributors and industrial service providers.

 

 

 

 

 

 

 

 

 

 

 

 

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