Report: Critical Manufacturing Sector Faces Series of Challenges

Manufacturing generated 11.2% of Connecticut’s GDP in 2025 and remains one of the state’s most important economic sectors.

However, a new report shows Connecticut manufacturers are grappling with rising costs, workforce shortages, trade disruptions, and some of the highest energy prices in the nation.

The 2026 Connecticut Manufacturing Report, produced by the CBIA Foundation for Economic Growth & Opportunity with support from RSM, found that 93% of manufacturers say the cost of doing business is increasing.

Released today at the Made in Connecticut: 2026 Manufacturing Summit, the report examines where the industry stands and what it will take to compete in the years ahead.

Key Takeaways

• Connecticut manufacturing generated 11.2% of the state’s GDP in 2025
• 68% of manufacturers turned a profit in 2025; the same share predicts a profitable 2026
• 93% of manufacturers say the cost of doing business is increasing, driven by energy, healthcare, and labor
• 59% of manufacturers expect tariffs to negatively affect their business over the next year
• 88% of manufacturers say it takes at least two weeks to fill an open job; 38% say it takes more than eight weeks
• Manufacturers are investing most in new technology and equipment, but capital investment per worker remains nearly 29% below the national average

Rising Costs

“Connecticut manufacturing is an economic powerhouse,” said CBIA president and CEO Chris DiPentima.

“The industry generates more than 11% of the state’s GDP, supports more than 156,000 jobs, produces some of the country’s most advanced products, and anchors supply chains that span the globe.”

“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.”

Manufacturers pointed particularly to energy costs. When asked what the General Assembly’s top priority should be in 2027, 62% selected energy costs, placing the issue at the top of the list.

“For manufacturers running energy intensive facilities and equipment, even a small difference in energy prices can mean hundreds of thousands of dollars to operating costs,” DiPentima said.

A shrinking labor force remains one of the industry’s most pressing long-term challenges, he added.

“There are more than 7,000 job openings across the industry, with an aging workforce, slower population growth, and sharp pullback in immigration only compounding the problem.”

Trade and Tariffs

DiPentima also noted the increasing disruptions from shifting trade policies.

Rising trade tensions with key international partners come at a time when manufacturers need to invest in equipment, facilities, and new technologies to remain competitive.

“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.

Still, DiPentima noted Connecticut manufacturers remain resilient despite rising costs and ongoing economic and political uncertainty.   

“Manufacturers are producing more value with fewer workers, investing in increasingly advanced technologies, and competing in industries that are critical to the state, country, and world,” he said.

“Connecticut already has the talent, expertise, and manufacturing base to compete on the global stage.

“What’s needed now are policies that lower costs, strengthen the workforce, support innovation, and give manufacturers the confidence to invest and grow here.”