St. Paul, MN – Business services firms in Minnesota expect modestly improving outcomes in the year ahead, but they are concerned about inflation and its impact on consumer spending, according to a survey conducted by the Minnesota Department of Employment and Economic Development (DEED) and the Federal Reserve Bank of Minneapolis.

More than three-quarters of respondents to the survey say they expect revenue, productivity, employment and labor availability to either increase or stay the same over the next 12 months. Most respondents reported improvements or unchanged conditions in those same categories over the preceding 12 months.

At the same time, most respondents expect higher business costs in the year ahead, and one-third project higher selling prices – leading most to say consumer spending will soften and inflation will worsen.

"This survey reflects the unusual state of our economy: business services firms are modestly optimistic about their industries but federal policies, like unpredictable and ever-changing tariffs, that influence costs are causing disruption and uncertainty," said DEED Commissioner Matt Varilek. "Coming out of the 2025 Legislative session, DEED is investing in business expansion and workforce development so Minnesota companies can continue to thrive here, despite this tumultuous backdrop."

"This survey provides us with insights on crucial aspects of the economy like employment and inflation," said Joe Mahon, regional outreach director for the Federal Reserve Bank of Minneapolis. "This information is especially valuable in times of heightened uncertainty."

The Business Services Industry Conditions Survey measures the opinions of Minnesota business services firms about their own operations, as well as the state of the economy overall. Accounting firms, computer consultants, advertising and public relations agencies and other types of service companies support the activities of other businesses, and their performance is an indicator of overall business conditions and trends across industries and throughout the state. This year's survey included responses from 160 businesses.

DEED and the Federal Reserve Bank of Minneapolis have conducted this survey annually since 2006. A detailed report of the 2025 Survey of Minnesota Business Services Firms is available on the DEED website.