Minnesota Ag Connection - Minnesota Businessess Expect Stable Conditions in 2020

Minnesota Ag News Headlines

Minnesota Businessess Expect Stable Conditions in 2020
Minnesota Ag Connection - 07/17/2019

Minnesota business service firms feel positive about the economy, with 86 percent expecting sales revenue to increase or remain stable next year, according to a joint survey released Tuesday 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 labor availability will grow or remain stable in 2020. Seventy-nine percent expect labor availability to remain stable, while 13 percent expect a decline. Only 8 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 such as accountants, engineers, architects and technology firms interact with a large portion of Minnesota’s diverse business community,” said DEED Commissioner Steve Grove. “These services are often some of the first to experience slowdowns in the economy. The fact that the majority of those surveyed expect a stable year ahead is an encouraging sign.”

Highlights from the study include the following:

1. 46 percent expect sales to grow and 40 percent expect them to remain the same in 2020.

2. 42 percent expect profits to grow and 40 percent expect them to remain the same.

3. 39 percent expect productivity to grow and 56 percent expect it to remain the same.

4. 28 percent expect employment levels to grow and 67 percent expect them to remain the same.

Respondents also were positive about performance of their businesses in the previous 12 months, with 77 percent saying revenue increased or was the same and 71 percent saying profits increased or were the same.

A new question asked about employee retirement and replacement over the next two years. Forty-five percent of respondents indicated they plan to replace retired employees one-for-one. Replacement less than one-for-one for higher technology (13 percent) and higher skilled workers (six percent) were less favored alternatives.

DEED and the Federal Reserve Bank of Minneapolis have conducted this survey annually since 2006. The DEED website has more details on the 2019 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.

Other Minnesota Headlines