Supply Chain Report – 10/06/2025
Connecticut’s manufacturing sector is facing a combination of challenges tied to shifting trade policies, rising costs, and ongoing labor shortages. At the 2025 Made in Connecticut Manufacturing Summit, organized by the Connecticut Business and Industry Association (CBIA), hundreds of business leaders gathered to discuss the pressures reshaping the state’s industrial economy.
While many manufacturers continue to report growth and profitability, executives noted that success is increasingly offset by difficulties in hiring skilled workers, dealing with higher costs, and navigating frequent changes in federal trade policy.
Tariffs and trade policy challenges
National trade policy, particularly recent tariff announcements, remains a major concern. Over the past year, the Trump administration has expanded tariffs on imported goods, a move officials say is intended to boost domestic production. However, manufacturers in Connecticut reported that the abrupt policy changes are creating significant uncertainty.
A CBIA survey released at the summit found that 66 percent of Connecticut manufacturers say tariffs are negatively affecting their businesses. Many cited rising input costs, supply chain delays, and reduced access to overseas markets. Local exporters, who depend heavily on trade with Canada, Mexico, and other key partners, said retaliatory tariffs from those countries have further complicated the situation.
John Murphy, senior vice president for international trade policy at the U.S. Chamber of Commerce, emphasized the need for better communication. “We need more of a flow of information between industry and the administration before tariffs go into effect,” he said. Murphy also suggested that the current scope of tariffs may be broader than necessary, putting additional strain on businesses already facing headwinds.
Strains on local businesses
For many Connecticut manufacturers, the costs of tariffs come on top of other financial pressures. Martin Baumann, president of ARBURG Inc., a plastic processing machine manufacturer, said the added expenses feel immediate and burdensome. “The short-term pain is real, and I don’t think it’s that short-term,” he said.
With new tariffs on imported furniture and related goods set to take effect later this month, many at the summit voiced concerns that higher costs would continue to ripple through the supply chain, impacting both businesses and consumers.
Labor shortages and rising costs
Alongside tariff concerns, labor shortages remain one of the most pressing challenges. According to the CBIA survey, 82 percent of manufacturers said they are struggling to recruit and retain workers. Rising labor, healthcare, and energy costs were also cited by nearly all respondents as major hurdles.
Despite these obstacles, many businesses are still finding ways to succeed. Seventy percent of manufacturers reported profits in 2024, while another 14 percent broke even. Only 16 percent recorded losses.
Manufacturing continues to play a significant role in Connecticut’s economy. The state is home to 4,591 manufacturing companies, most of which are small businesses with fewer than 500 employees. Together, they employ around 153,600 people and account for 11.6 percent of Connecticut’s GDP. Connecticut ranks 27th nationally and second in New England for exports.
Adapting for the future
Even with modest gains, the industry has not fully recovered from the pandemic’s impact. Since 2020, Connecticut manufacturers have only regained 39 percent of the jobs lost. Between September 2024 and August 2025, the sector shed 1,800 additional jobs.
Recognizing these challenges, state officials and business leaders are shifting their focus. Last year, Governor Ned Lamont emphasized productivity improvements rather than job growth, pointing to new tools like automation, artificial intelligence, and robotics as key drivers for the sector’s long-term competitiveness.
CBIA President Chris DiPentima said the findings reflect both the resilience and the struggles of Connecticut manufacturers. “Manufacturers are growing despite navigating numerous headwinds, including increased labor, healthcare, and energy costs,” he said.
To address these ongoing challenges, CBIA announced the creation of the CBIA Manufacturing Coalition, an initiative designed to foster collaboration and shared solutions. Supporters said the coalition could help companies pool resources, share expertise, and strengthen the industry’s voice in policy discussions.
Beatriz Gutierrez, head of manufacturing consultancy CONNSTEP, emphasized the importance of such partnerships. “Amid ongoing labor shortages and supply chain uncertainty, it is strong collaborations like these that will give manufacturers the tools and voice to position the industry to grow and thrive,” she said.
As Connecticut’s manufacturers look ahead, they remain optimistic that cooperation, innovation, and advocacy will allow the sector to overcome current challenges and maintain its critical role in the state’s economy.
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