Business Services Firms in Minnesota Predict Moderate Growth
~ Profits, Wages Anticipated To Improve ~
ST. PAUL – Professional business services firms in Minnesota anticipate sales revenue, profits and wages to grow moderately over the next year, according to the findings of a statewide survey conducted by the Minnesota Department of Employment and Economic Development (DEED) and the Federal Reserve Bank of Minneapolis.
The random sample survey of leaders at 275 professional business services firms, such as advertisers, accountants, and computer and public relations consultants, found that about two-thirds of firms expect increases in employee wages over the next year. In addition, 40 percent of respondents expect increases in revenue, and 39 percent expect increases in profits.
“Business services firms in Minnesota are predicting growth even as they anticipate rising costs of inputs, weaker consumer spending and reduced corporate profits,” said DEED Commissioner Dan McElroy. “These findings are encouraging, since business services firms are important indicators of business conditions and trends.”
Fourteen percent of the business services survey respondents expect to increase employment during the next year compared with 8 percent that may cut jobs. In addition, about 40 percent of business survey respondents indicated they would not fully replace retiring employees.
Conducted in May and June of this year, this is the third survey of Minnesota business services firms released from DEED in conjunction with the Federal Reserve Bank of Minneapolis. The survey has a margin error of plus or minus 5.8 percent at a 95 percent confidence level.
This month DEED reported that employment in Professional and Business Services in Minnesota has increased 0.7 percent over the year, compared to a 0.4 percent decrease nationwide. In addition, employment projections indicate that this industry sector is expected to grow 20 percent statewide between 2006 and 2016.
The full business services survey report is available on the DEED web site: www.positivelyminnesota.com/facts/busservices.htm
The survey, prepared by the DEED Office of Analysis and Evaluation in conjunction with the Federal Reserve Bank of Minneapolis, elicited 275 responses from randomly selected Minnesota business services firms. The sampling error is +/- 5.8 percent. As one of 12 regional Reserve banks that serve as the nation’s central bank, the Federal Reserve Bank of Minneapolis is responsible for making and carrying out monetary policy, supervising and regulating banks and bank holding companies, and providing financial services to depository institutions and the U.S. Treasury.
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