Survey: CT manufacturers face rising costs, tariff concerns despite profitable outlook

Rising costs and tariff uncertainty are weighing on Connecticut manufacturers, even as more than two-thirds expect to turn a profit this year, according to a new industry survey released Thursday. The 2026 Connecticut Manufacturing Report found that 93% of respondents say their business costs are increasing, driven by energy, healthcare and labor. Meanwhile, 59% expect tariffs to negatively affect their operations over the next year. Despite those pressures, 68% expect to be profitable in 2026, matching the share that reported a profit in 2025. More than half of respondents, 57%, expect their workforce to remain stable this year, while 35% anticipate adding workers and 6% expect staff reductions. The report, produced by the CBIA Foundation for Economic Growth & Opportunity with support from accounting firm RSM, was released at CBIA’s Made in Connecticut manufacturing summit in Hartford. “Connecticut manufacturing is an economic powerhouse,” said CBIA president and CEO Chris DiPentima. “... However, our manufacturers can’t continue absorbing rising costs indefinitely. And the state’s significant structural challenges should concern every policymaker, business leader, and resident.” Energy costs topped manufacturers’ priorities for the next legislative session. Asked what the General Assembly should focus on in 2027, 62% of respondents selected energy costs. Connecticut had the nation’s sixth-highest average industrial electricity price from July 2025 through June 2026, at 18.08 cents per kilowatt-hour — more than twice the national average, according to the report. Hiring also remains difficult. The report found that 88% of respondents take at least two weeks to fill an open position, including 38% who say the process takes more than eight weeks. DiPentima said the industry has more than 7,000 job openings, with an aging workforce, slower population growth and reduced immigration adding to recruiting challenges. Trade policy is another source of pressure as manufacturers weigh investments in equipment, facilities and technology. “Trade and tariff policy is set at the federal level, but the uncertainty and added costs are putting more pressure on Connecticut manufacturers already operating on tight margins,” DiPentima said. The report estimates that the effective tariff rate on Connecticut’s manufactured imports rose from 1.25% in 2024 to 7.07% during the first seven months of 2026. Applied to current import volumes, that increase would represent about $1.2 billion in additional tariffs annually. New technology and equipment were respondents’ leading investment category, cited by 30%, according to the report. In 2022, Connecticut manufacturers invested $11,169 per worker in capital expenditures, nearly 29% below the national average of $15,683. Investment per worker has remained below the national average since 2017, according to the report. The University of New Hampshire Survey Center conducted the survey for the CBIA Foundation. Invitations were sent to more than 3,300 top executives statewide from July 2 to July 7, with an 11% response rate, according to the CBIA. Manufacturers accounted for 34% of respondents, CBIA said.