Minnesota’s Manufacturing Faces a Rough 2025

2025 was a tough year for Minnesota’s manufacturing industry. New survey data reveal a significant slump in manufacturing activity across the state, primarily driven by the rising tariffs that have pinned down many mid- to small-sized manufacturers.

Manufacturing managers across Minnesota voiced their resistance to these tariff increases, emphasizing how these higher import duties have raised raw material costs and squeezed profit margins. Without the cushioning effect of large-scale resources, many smaller businesses struggled the most, finding it much harder to stay competitive in global markets.

Manufacturing remains one of Minnesota’s economic backbones, supporting thousands of jobs statewide. But as cost pressures mount, some companies have had to slow output or even downsize operations. This threatens not just individual businesses but also the broader regional employment landscape.

Digging into the survey details, there’s palpable concern among managers about the uncertainty stemming from tariff policy shifts. This lack of clarity has interrupted strategic planning and forced many to postpone investments, denting overall confidence in the sector’s future.

The burden of tariffs weighed heaviest on small and medium manufacturers, which lack the capital and supply chain flexibility of larger firms. As a result, many faced tough choices, including layoffs or partial shutdowns, to stay afloat.

According to the latest stats from Minnesota’s Manufacturing Association, output dropped about 4% year-over-year in 2025. New orders and shipments also saw declines. Should this trend continue, the ripple effects could slow down state economic growth, disrupt employment rates, and impact household incomes.

In short, Minnesota’s manufacturing sector is caught in a structural squeeze amid a volatile global trade environment. More measured trade policies and stable support measures will be crucial to restore confidence and encourage sustainable growth going forward.