A recent survey of manufacturing managers across nine Midwest states, including Minnesota, showed the region’s business conditions index fell below growth-neutral for the fourth time in the last six months. 

Nebraska-based Creighton University is behind the index, which tracks orders, inventory, wages, job openings and more. Anything above an index of 50 indicates positive growth, anything below 50 indicates negative growth. 

Minnesota’s business condition index fell to 45.7 in December from November’s 49.4.

“Exports have declined fairly significantly with tariffs,” said Ernie Goss, an economist at Creighton. “Some of our trading partners, particularly China, have responded and retaliated against our products.”

In Minnesota, manufacturing exports for the first three quarters of 2025 declined 13.5 percent year over year, from $19 billion in 2024 to $16.4 billion in 2025.

Tariffs aren’t the only challenge facing manufacturers, Goss added. Tighter immigration policies from the Trump Administration have shrunk hiring pools for many firms that previously relied on qualified immigrant labor. That factor is partly behind Minnesota’s 41.5 employment index.

“The other factor is that companies are just very cautious about hiring,” Goss said. “So they’re not laying off or firing to any great degree.”

The mix of small and large manufacturing firms has created divided opinions on the regional industry’s outlook for 2026, according to the survey. 

Bigger companies that can cope with negative impacts from tariffs are more likely to support them and feel optimistic about 2026, Goss said. However, medium- and small-sized companies, which aren’t as able to absorb tariff-related costs, are showing more resistance to the idea of expanded tariffs. 

“We often hear about the K-shaped economy for consumers, those who are on the higher end doing well, and those on the other part of the ‘K’ not so well,” Goss said. “I think we can also say that for manufacturing companies.”

Collected from Minnesota Public Radio News. View original source here.