MN Biz Services Firms Mostly Optimistic About Next Yr.
The vast majority of professional business services firms in Minnesota expect stable or increasing revenues over the next year—a positive signal for the state’s economy, according to a statewide survey conducted in April and May by the Minnesota Department of Employment and Economic Development (DEED) and the Federal Reserve Bank of Minneapolis.
Almost half, or 48 percent, of those surveyed expect a revenue boost, and 40 percent expect profits to rise for the next four quarters. Meanwhile, one-third of respondents expect revenue and profits to remain flat. A random sample of the state’s professional business services firms was asked to participate in the survey—and 246 professional business services firms responded.
“Business services firms are important indicators of business conditions and trends, and in Minnesota, we’re seeing signs of recovery in revenue and productivity,” DEED Commissioner Mark Phillips said in a statement. “While business services firms anticipate more merger activity, they’re also optimistic that a stronger economic recovery is in the picture for 2013.”
A wide variety of firms that provide business services were included in the survey, including engineering companies, accounting firms, computer consulting companies, and public relations firms.
Survey respondents displayed mild confidence about employment: 23 percent expect to boost employment during the next four quarters, while 8 percent indicated they may cut jobs; 60 percent expect no change in employment. Meanwhile, 58 percent expect to increase employee wages.
More good news: Business services firms are relatively optimistic about the overall state economy. Forty percent expect increased consumer spending and 37 percent anticipate growth in corporate profits in the coming four quarters. Four in 10 respondents think mergers and acquisitions will increase as well.
However, the firms surveyed did voice some concerns. Nearly half are worried about rising input costs, and roughly 65 percent expect inflation to grow.
Over the past four quarters, most economic indicators showed signs of recovery for the state’s business services firms. Forty percent reported an increase in revenue, and 36 percent said that productivity improved. Profits, meanwhile, increased or remained flat for 63 percent of respondents and decreased for the remaining 37 percent.
Twenty-three percent of businesses reported growth in employment for the last four quarters, and 53 percent boosted the wages of employees.
Twin Cities Business’ last quarterly economic indicator survey mirrored many of the trends from the just-released report. Half of Minnesota businesses expected the state economy to improve in the quarter that ended in late May—and 40 percent planned to increase headcount during that period, the survey found. To read more results from that survey, click here. The results of the next quarterly economic indicator survey will appear in the August issue of Twin Cities Business.