Minnesota Business Firms Expect Unchanged Conditions for 2019

ST. PAUL – Minnesota business services firms feel positive about the economy, with nearly 90 percent expecting sales revenue to increase or remain stable next year, according to a joint survey released today by the Minnesota Department of Employment and Economic Development (DEED) and the Federal Reserve Bank of Minneapolis.

Business services firms are less optimistic, however, that productivity and employment levels will grow or remain stable in 2019. Sixty-eight percent expect their supply of workers to remain stable. That’s down from 77 percent last year. Only 7 percent of respondents anticipate labor availability to grow next year.

The results were based on a random sample of 1,200 Minnesota business services firms in May and June.

“Business services firms such as accounting, public relations and technology firms, interact with much of the state’s overall economy,” said DEED Commissioner Shawntera Hardy. “The fact that that these businesses expect stable conditions in the next year is an encouraging sign.”

Highlights from the study include the following:

1. 49 percent expect sales to grow and 40 percent expect them to remain the same in 2019.

2. 45 percent expect profits to grow and 41 percent expect them to remain the same.

3. 34 percent expect productivity to grow and 60 percent expect it to remain the same.

4. 22 percent expect employment levels to grow and 73 percent expect them to remain the same.

Respondents also were positive about performance of their businesses in the previous 12 months, with 81 percent saying revenue increased or was the same and 75 percent saying profits increased or were the same.

A new question asked about impact of changes in federal tax legislation. The large majority of respondents reported no changes in employment (83 percent), capital expenditure and wages (72 percent), customer demand (68 percent) and profits (66 percent), due to this new federal law.

The DEED website has more details on the 2018 Survey of Minnesota Business Services Firms.

DEED is the state’s principal economic development agency, promoting business recruitment, expansion and retention, workforce development, international trade and community development. For more details about the agency and its services, visit the DEED website or follow us on Twitter.