By Tom Still

MADISON, Wis. — Most Wisconsin manufacturers, large and small, did their best to manage COVID-19 and its aftermath. As the pandemic eased, they were confronted with supply chain woes, worker shortages, inflation and rising interest rates. If any group deserves to be dispirited and a bit worn down, it’s them.

Instead, a survey of 400 Wisconsin manufacturers shows most (86%) are generally optimistic about the financial outlooks of their own companies, even if they harbor doubts about the overall condition of the U.S. and Wisconsin economies.

The second annual “Wisconsin Manufacturers Survey” from the Wisconsin Center for Manufacturing & Productivity also revealed some clear differences in how companies with 50 or more employees are managing current threats than manufacturers with fewer workers.

For some of those smaller companies, how they approach workforce challenges, dealing with inflation and managing energy costs may be key to continued profitability.

About three-quarters of the late-summer respondents to the survey were C-level executives from “small” manufacturers, defined as 50 or fewer workers, and the rest were leaders from manufacturers of all sizes above 50 employees. Because the larger firms are having more trouble than smaller companies in finding workers, they’re turning to technology and automation.

That change is occurring in a big way, according to Buckley Brinkman, WCMP’s director and chief executive officer.

“Large manufacturers are having a harder time finding workers than smaller companies and are going all in on automation to make up the shortfall,” Brinkman said. “That automation is also reducing their costs, improving their quality, and making their operations more resilient. It’s altering the manufacturing landscape because companies able to automate are bringing subcontracted parts back in-house, which puts smaller manufacturers at risk.”

Maybe that partially explains why smaller companies (in this case, defined as revenue between $1 million and $5 million per year) were 18 percentage points less likely to expect an increase in 2022 compared to last year. For companies above $5 million in revenue, the “expectation drop” was only 6 percentage points from 2021.

Even though smaller manufacturers in the survey reported somewhat more success in finding workers, they likely can’t keep up with the much-larger “Joneses” forever.

“Small- and medium-sized manufacturers need to engage in an ‘all the above’ strategy to retain employees,” Brinkman said. “We see too many companies fight a losing battle by trying to compete on wage rates alone with Wisconsin’s larger companies.”

Some good news in the survey: Supply-chain problems fell back a few notches from 2021 on the list of concerns among manufacturers, although it’s far from back to normal. Fewer manufacturers were also deeply concerned about the cost of providing health-care coverage for their employees.

Not-so-good news: Along with general inflation, specific worries about energy costs shot up. In 2021, a combined 47% of respondents ranked energy costs high on their list of concern. In 2022, it rose to 67% … and that was well before this week’s announcements about oil production cutbacks in Saudi Arabia and Russia.

So, what happens if the economy slips into recession, as some economists have forecast and traditional public market indexes already show?

“In all the data we gathered, we consistently find a group of about 20 percent of our manufacturers under severe stress,” Brinkman said. “If these manufacturers are struggling during a strong market, they will be at serious risk in a weaker market.”

That’s not to say all 400 manufacturers surveyed by WCMP think a recession is already underway. About 20% said the economy is still growing, 22% slowing down, 28% mostly flat and 28% in recession, with 2% not sure.

Perhaps that explains the imbedded optimism in Wisconsin’s manufacturing corps. As survey manager Rob Autry told a Brookfield group about the results: “Maybe the state’s business direction is not as solid as it was a year ago… but manufacturers are certainly just as confident about the future of their own firms as they were a year ago.”

Let’s see how the rest of 2022’s fourth quarter plays out.

Still is president of the Wisconsin Technology Council. He can be reached at

First Business Bank, a Wisconsin Technology Council member, sponsored the WCMP Manufacturers’ Survey.