Minnesota Manufacturers Doing Business Globally

For two straight quarters in 2008, Minnesota manufacturers set records for export growth despite economic uncertainty.
 
In the second quarter 2008, exports grew in eight of the top 10 manufacturing sectors seven of the top ten markets, rising to $4.4 billion according to the Minnesota Department of Employment and Economic Development (DEED). A record for the quarter, it was subsequently toppled in third quarter 2008 when exports rose to $4.5 billion. Statistics for the fourth quarter are pending release in early 2009.
 
Even before announcing fourth quarter 2008 numbers, DEED expects the state to be on pace to break the annual export record from 2007. Through the third quarter 2008, Minnesota exports grew 9.5 percent to $13.1 billion compared with $16.2 billion for 2007.
 
"Minnesota manufacturers have remained resilient despite a slowing global economy, ranking second among Midwestern states for total export sales," DEED Commissioner Dan McElroy said.
 
At the same time that exports are rising, other industry numbers are holding outlooks tempered. In the recent Beige Book from the Federal Reserve Bank, a survey of Minnesota's manufacturers found 2008 flat, and expected declines in employment, orders, and production during 2009. DEED figures show more than 11,000 Minnesota manufacturing jobs lost during the past 12 months.
 
While employment numbers in the industry continue to slide, the world market is a bright spot. A weak US Dollar in foreign markets is driving the trend, and Minnesota's manufacturers are exporting roughly 14 percent of their total products.
 
Manufacturers' expansion into markets in countries such as China and Canada is a bright spot among a year of otherwise difficult news, but the record setting pace may begin to tail-off says Federal Reserve Bank Associate Economist Rob Grunewald.
 
"Not only has global demand slowed since September, the U.S. dollar has strengthened against a number of currencies," Grunewald said. "Because the downturn occurred in the fourth quarter, we're curious to see if those numbers might be softer moving forward."
 
This snapshot reinforces a need for the state's manufacturers to be on a higher level of innovation and foresight to compete globally says Enterprise Minnesota President and CEO Bob Kill.
 
"The world market is open for Minnesota's manufactured goods," Kill said. "A recent study showed that, of all manufacturers nationwide, just five percent are 'truly advanced,' meaning that they have already embraced the processes and methods that enable them to compete anywhere, with anyone. The economy, the marketplace, and the workforce are changing; business must change likewise."
 
Kill stressed that manufacturing creates good jobs, and the industry has a large impact on the state's economy.
 
A recent study DEED found that more than one in ten Minnesota jobs are manufacturing. Each of these jobs supports another 1.3 related jobs - meaning that nearly 800,000 jobs in Minnesota are associated with manufacturing. That is 29 percent of the state's workforce.These manufacturing jobs pay higher than average salaries. In 2007, a manufacturing employee in Minnesota received an average $1005 weekly wage, compared with $853 for all industries combined. 
 
"Manufacturing has been, and will continue to be the backbone of Minnesota's economy," Kill said. "No matter the ebb and flow of economic times, manufacturing remains a constant strength. It's a matter of companies taking the measures to invest in themselves and be in a position to compete and grow."
 
Look for the upcoming January/February issue of Enterprise Minnesota magazine cover story "Rock Solid Jobs." It is an in-depth look at the impact of manufacturing in Minnesota, and debunks many myths associated with the industry.

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NEXT WEEK:
Developing Leaders at All Levels in Business

DATE: Wednesday, January 21, 2009

TIME: 8:00 am - 11:30 am

LOCATION: Dunwoody College of Technology (map)

COST: $129.00 or group rate is 4 attendees for $475.00

Come learn from industry experts about strategies to

• Maximize leadership effectiveness at every level of your organization.
• Create a culture that allows everyone to better meet organizational goals.
• Provide each person in your organization the opportunity to improve their skills to help impact bottom lines results

Speakers include:

• Michele Bonahoom, President, Vision One Coaching & Consulting (Burnsville, MN)
• Bill Doty, President, NACS, Inc. (Ham Lake, MN)
• Jan Hepola, Business Growth Specialist, Enterprise Minnesota

Followed by a panel with:

• Greg Closser, President, All Flex Acquisitions, LLC (Northfield, MN)
• Mike Jensen, President, Gauthier Industries (Rochester, MN)
• Amy Karrow, HR Manager, Engineered Products Co. (Minnetonka, MN)

For questions or more information email events@enterpriseminnesota.org or call our events line at 612.455.4239.

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