Employers named skills gaps as the top barrier to attracting new talent.
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Sixty-six percent of Connecticut manufacturers recently surveyed say that tariffs will negatively affect their businesses in 2025. More than half expect inflation to rise next year.
The figures come from a new report, Made in Connecticut, just issued by the Connecticut Business & Industry Association, along with CONNSTEP and ReadyCT.
Meanwhile, more than 80% of manufacturers surveyed in Connecticut say they’re having difficulty finding and retaining workers.
That response is consistent with last year’s survey.
Employers named skills gaps as the top barrier to attracting new talent. The cost of doing business was also a big concern with 95% saying that costs are on the rise, driven by labor, healthcare and energy expenses.
Speaking at the CBIA’s Made in Connecticut event Thursday, John Murphy, head of international at the U.S. Chamber of Commerce said the Trump administration’s tariff regime has become too complex.
“I do think there’s more and more voices speaking about the need for restraint on all of this,” he said.
He said the biggest looming threat to Connecticut is the possibility of tariffs on the aerospace sector, which the Trump administration is considering.
“The idea that we’re going to impose tariffs here on a sector that is incredibly successful, huge exporter, jobs in every state, leaves you scratching your head,” Murphy said.
He said the industry is actively lobbying the administration on the issue, and meeting with some success.
Murphy praised the One Big Beautiful Bill for its permanent tax provisions that benefit manufacturers, including immediate expensing of research and development, more generous limits for interest deduction, and 100% bonus depreciation for some investments.
“We should celebrate the business tax provisions in this bill,” he said.
Seventy percent of firms surveyed for the CBIA’s report were profitable in 2024 — that’s up from 65% in 2023, while 14% broke even and 16% reported losses. In 2023, 21% posted losses.
Exports rose to $16.1 billion in 2024, and defense contract spending reached $26.6 billion.
“This year’s report highlights both the enduring strengths and the pressing challenges facing Connecticut manufacturing,” said CBIA President and CEO Chris DiPentima.
“Manufacturers are growing despite navigating numerous headwinds including increased labor, healthcare, and energy costs. Growing uncertainty due to volatility surrounding federal tariff and trade policies are also testing manufacturers’ resilience.”
Some 27% of firms say they have integrated artificial intelligence technologies into their workflow.
The report also marks the launch by CBIA and CONNSTEP of a new manufacturing coalition in the state.
The aim is to build a statewide manufacturing community that drives growth through training, resources, and strategic networking.
“Amid ongoing labor shortages and supply chain uncertainty, it is strong partnerships like these that will give manufacturers the tools and voice to position the industry to grow and thrive,” said CONNSTEP President and CEO Beatriz Gutierrez.
