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Business Services Firms Optimistic About Economy

Most expect growth or stability in 2018

7/12/2017 10:05:11 AM

Shane Delaney, 651-259-7236
Shane.M.Delaney@state.mn.us

ST. PAUL – Minnesota business services firms feel positive about the economy, with more than 80 percent expecting revenue and profits 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 also are optimistic that productivity and employment levels will grow or remain stable in 2018. While just 5 percent of respondents anticipate labor availability to grow next year, 77 percent expect the supply of workers to remain stable.

The results were based on a random sample of 242 Minnesota business services firms in May and June.

“Business services firms deploy the foundational activities for companies in such areas as accounting, public relations and technology,” said DEED Commissioner Shawntera Hardy. “The fact that these businesses expect growth or stable conditions in the next year is a good sign for the overall economy.”

Highlights from the study include the following:

1. 51 percent expect sales to grow and 34 percent expect them to remain the same in 2018.

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

3. 32 percent expect productivity to grow and 63 percent expect it to remain the same.

4. 21 percent expect employment levels to grow and 71 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 73 percent saying profits increased or were the same.

Outcomes in the past year for productivity, employment levels, labor availability and selling prices also were positive.

When asked how credit conditions affected their firms in the past year, 84 percent said there was no impact. Asked how labor turnover affected their businesses, 74 percent cited no change and 20 percent said turnover had increased.

The DEED website has more details on the 2017 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 DEED on Twitter.

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Upon request, this information can be made available in alternate formats for people with disabilities by contacting the DEED Communications Office at 651-259-7161.

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