Connecticut manufacturers are struggling to keep up with rising costs and a shortage of qualified workers, according to a new survey released Wednesday.

But there’s also room for optimism, business leaders say.

From Sikorsky’s sprawling helicopter campus in Stratford to PEZ Candy in Orange, manufacturers drive a large part of Connecticut’s economy. But according to the 2024 Connecticut Manufacturing Report, 80% of employers can’t find enough qualified workers and 87% said the cost of doing business is increasing. Businesses said the labor shortage is forcing them to offer higher salaries and benefits, while raw materials are getting more expensive.

“The one thing we know every year is, costs are going up, and we’re not in an industry where we can pass on those costs to our customers,” said Brian Montanari, CEO of HABCO, an aerospace contractor that services Pratt and Whitney engines.

At the annual Connecticut Manufacturers Summit on Wednesday, some companies said they’re turning to automation. Others are training high schoolers in apprentice programs.

Manufacturers also report a pessimistic view of the Connecticut economy. Only 5% think the state’s business climate is improving, while more than two-thirds said it’s static or getting worse.

Despite the survey results, the news is actually better than it seems. Although Connecticut lags behind the nation, our state’s economy is growing faster than the rest of the Northeast. The survey revealed that 65% of manufacturers made a profit last year.

“Today we have a reason to be optimistic,” said Daniel O'Keefe, the Connecticut Department of Community and Economic Development commissioner. “The trends that I’m seeing are the most constructive economically I’ve seen in a 20-year analysis of the state’s economy.”

The tide is turning thanks to a big jump in startups, a growing financial tech industry and a boost in federal defense spending.

“No one wants to talk about the good stuff,” O’Keefe said. “It’s not as interesting as the bad stuff.”

To help manufacturers find qualified workers, Connecticut has invested $145 million into training programs. Businesses can also get low-interest loans and investment capital.

But Connecticut still faces headwinds. Twenty percent of respondents said the state’s high cost of living is hampering growth, as well as a shortage of housing and child care.

“Young people need a place to live,” Gov. Ned Lamont told business leaders. “We were always a place where there was maybe a nice three-, four-bedroom place. You’ve got a family and growing. But we need places for young people to be.”