Metro Milwaukee Business Outlook Survey Second-Quarter, 2018

Transcription

1 Metro Milwaukee Business Outlook Survey Second-Quarter, 2018 Prepared by: Economic Research Division April 4, 2018 Metropolitan Milwaukee Association of Commerce

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3 Metro Milwaukee Business Outlook Survey - Page 1 Metro Milwaukee Business Outlook Survey, Second-Quarter, 2018 A strong business growth environment is forecast by metro area businesses for 2018 s second quarter, according to a business outlook survey conducted by the Metropolitan Milwaukee Association of Commerce (MMAC). Seventy-one percent of businesses surveyed expect sales increases in 2018 s second quarter, 66% see profit gains and 61% predict employment growth over year-ago levels. Most of 2017 was marked by rather unremarkable growth in the metro area, said Bret Mayborne, the MMAC s economic research director. Actual results posted in 2018 s early months and expectations particularly job expectations expressed toward future growth suggest that the trend has strengthened. Over two-thirds of area businesses see real, year-over-year sales gains in 2018 s second quarter. Seventy-one percent of those surveyed forecast second-quarter sales gains while only 8% see declines. The remainder (21%) see no change. Current expectations mark a modest increase from 2018 s first quarter when 69% saw increases. By industry, manufacturers posted the strongest sales expectations. Seventy-seven percent of manufacturers see real second-quarter sales gains (vs. year-ago levels), while 68% of nonmanufacturers see such increases. By firm size, large employers (100 or more employees) and small employers were equally optimistic, with 71% of each forecasting sales increases for the second quarter (vs. year-ago levels). Profit expectations remain strong. Sixty-six percent of all surveyed expect profit increases for the second quarter (vs. year-ago levels), nearly matching the 67% who forecast first-quarter profit gains. Profit optimism has exceeded current levels only three times in the post-recession period (2010 to current). Employment growth in the metro area has improved in the early months of Through February, jobs have grown at an average pace of 0.9% year-over-year after registering only a 0.3% average gain in 2017 s final three months. Job expectations among local businesses are strongly positive for the new quarter. Sixty-one percent of all employers surveyed see higher second-quarter job levels (vs. one-year ago), outnumbering those predicting job declines (7%) by over an eight-to-one margin. Thirty-two percent see no change in future job levels. Small employers (less than 100 employees) are more likely to see employment gains than large employers. Sixty-five percent of small employers expect second-quarter gains vs. 55% among large employers. The split is smaller among manufacturers vs. non-manufacturers, with a majority of both expecting growth. Sixty-three percent of manufacturers see second-quarter job gains vs. 59% among non-manufacturers. Projected future wage and salary gains reached its highest level in 17 years. Employers expect per employee wages and salaries to increase by 3.6% over the next 12 months, a level last exceeded by the 3.8% annual increase forecast in 2001 s first quarter.

4 Metro Milwaukee Business Outlook Survey - Page 2 Sales forecasts for 2018 as a whole nearly match those expressed at the beginning of the year. In 2018 s first quarter 80% of all survey projected 2018 sale increases, only modestly higher than the 79% of all surveyed who currently see gains for the year as a whole. Currently only 3% forecast a yearly sales decline while 18% see no change. The Business Outlook Survey conducted by the MMAC, contains responses from 119 Milwaukee area firms, both large and small, employing more than 33,500 people. For further information contact: Bret J. Mayborne Economic Research Director

5 Metro Milwaukee Business Outlook Survey - Page 3 MMAC s Second-Quarter 2018 Business Outlook Survey* Firms Employers by Size Employers by Industry Expecting a: Large Small (1) Manuf. Non-Manuf. TOTAL 2018 Forecast Change in the dollar volume of Sales (net of inflationary effects) expected by 118 Milwaukee area RISE : 39 (75%) 54 (82%) 36 (84%) 57 (76%) 93 (79%) firms for the entire year of 2018 DECLINE : 1 (2%) 3 (5%) 3 (7%) 1 (1%) 4 (3%) vs. the entire year of 2017: NO CHANGE : 12 (23%) 9 (14%) 4 (9%) 17 (23%) 21 (18%) 2018 Second Quarter (Compared to Previous Quarter) Change in dollar volume of Sales (net of inflationary effects) expected RISE : 38 (72%) 44 (67%) 33 (75%) 49 (65%) 82 (69%) by 119 Milwaukee area firms for 2nd DECLINE : 4 (8%) 6 (9%) 5 (11%) 5 (7%) 10 (8%) quarter 2018 vs. 1st quarter 2018: NO CHANGE : 11 (21%) 16 (24%) 6 (14%) 21 (28%) 27 (23%) 2018 Second Quarter (Compared to Same Quarter One Year Ago) Change in dollar volume of Sales (net of inflationary effects) expected RISE : 37 (71%) 47 (71%) 34 (77%) 50 (68%) 84 (71%) by 118 Milwaukee area firms for the DECLINE: 2 (4%) 7 (11%) 5 (11%) 4 (5%) 9 (8%) 2nd quarter 2018 vs. 2nd quarter 2017: NO CHANGE : 13 (25%) 12 (18%) 5 (11%) 20 (27%) 25 (21%) Change in the dollar volume of Profits expected by 117 Milwaukee RISE : 34 (65%) 43 (66%) 29 (66%) 48 (66%) 77 (66%) area firms for the 2nd quarter 2018 DECLINE : 5 (10%) 5 (8%) 3 (7%) 7 (10%) 10 (9%) vs. 2nd quarter of 2017: NO CHANGE : 13 (25%) 17 (26%) 12 (27%) 18 (25%) 30 (26%) Change in the level of Total Employment expected by 117 RISE : 28 (55%) 43 (65%) 27 (63%) 44 (59%) 71 (61%) Milwaukee area firms for the 2nd DECLINE : 5 (10%) 3 (5%) 2 (5%) 6 (8%) 8 (7%) quarter 2018 vs. 2nd quarter 2017: NO CHANGE : 18 (35%) 20 (30%) 14 (33%) 24 (32%) 38 (32%) Change in the per person, employee Wages & Salaries expected in the next 12 months: AVERAGE: 3.1% 4.1% 3.6% 3.7% 3.6% * Percentages may not sum to 100 due to rounding. (1) Employment of less than 100 people.

6 90% 80% 70% 60% 50% 40% 30% 20% 10% Rise Decline No Change Metro Milwaukee Business Outlook Survey - Page 4 Quarterly Real Sales Expectations - Metro Milwaukee (% of businesses expecting rise, decline or no chg. from same quarter one year ago) 0% Q1-01 Q1-02 Q1-03 Q1-04 Q1-05 Q1-06 Q1-07 Q1-08 Q1-09 Q1-10 Q1-11 Q1-12 Q1-13 Q1-14 Q1-15 Q1-16 Q1-17 Q % 80% 70% 60% 50% 40% 30% 20% 10% Rise Decline No Change Quarterly Real Profit Expectations - Metro Milwaukee (% of businesses expecting rise, decline or no chg. from same quarter one year ago) 0% Q1-01 Q1-02 Q1-03 Q1-04 Q1-05 Q1-06 Q1-07 Q1-08 Q1-09 Q1-10 Q1-11 Q1-12 Q1-13 Q1-14 Q1-15 Q1-16 Q1-17 Q % 80% 70% 60% 50% 40% 30% 20% 10% Rise Decline No Change Quarterly Employment Expectations - Metro Milwaukee (% of businesses expecting rise, decline or no chg. from same quarter one year ago) 0% Q1-01 Q1-02 Q1-03 Q1-04 Q1-05 Q1-06 Q1-07 Q1-08 Q1-09 Q1-10 Q1-11 Q1-12 Q1-13 Q1-14 Q1-15 Q1-16 Q1-17 Q1-18