The challenges facing state industry are the availability and sustainability of a skilled work force, high health-care costs and high taxes.
In spite of these barriers, research by the Connecticut Business & Industry Association (CBIA) and Blum Shapiro Consulting L.L.C., the largest regional accounting firm in the state, shows manufacturers are expanding operations, developing new products and realizing profits ”“ and can continue to do so.
“For the fourth straight year, manufacturers are worried about the high price of doing business in Connecticut,” said Brian Renstrom, partner at Blum Shapiro. “But manufacturers need to take the initiative and figure out what each company can do to streamline its processes and encourage growth.”
The findings by CBIA and Blum Shapiro in their 2007 survey of Connecticut businesses stress the issues confronting manufacturers.
“Connecticut manufacturers are facing myriad challenges, both domestically and internationally, but are highly innovative, resourceful and resilient even in the face of those challenges,” said John R. Rathgeber, CBIA president and CEO. “It’s critically important that state policymakers foster a business climate in which manufacturers find solutions to those challenges so they can continue to innovate, grow and succeed.”
While 74 percent of manufacturing companies hired new employees in the last year, and 73 percent expect to hire in the next 12 months, the majority of them reported trouble finding and attracting qualified workers.
“Our manufacturers are at a crossroads,” said John M. Kirschner, partner and director of the manufacturing and distribution industry group at Blum Shapiro. “It’s time for business owners and managers, state officials, legislators and educators to evaluate what they’re doing to appeal to, or even reach, potential new workers.”
Despite these challenges, manufacturers are coming up with ways to improve their businesses and turn a profit. Many companies are implementing lean manufacturing processes in order to create maximum efficiency.
“What many businesses are doing is focusing their manufacturing on target-market selling,” said Frank J. Johnson, president and CEO of the Manufacturing Alliance of Connecticut. “A great example of that is the medical-device industry, which doesn”™t have a large market overseas. The companies that are flexible, innovative and embracing change are the ones that are going to continue doing well and continue to expand their businesses in Connecticut.”
Seventy-two percent of the survey respondents said their companies recorded a net profit in 2006, but they were less confident about future business and economic conditions. One-quarter of manufacturing executives expect business conditions for their firms to be poor or fair in the next 12 months.
“Manufacturers are persevering through many difficult challenges, and we need to do all we can to make sure manufacturing continues to grow and to be one of Connecticut ‘s great economic strengths,” said Peter Gioia, CBIA vice president and economist.
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