Fourth Quarter, 2014

For further information contact Economic Research Director BRET MAYBORNE at (414) 287.4122

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October 13, 2014 – Expectations among Milwaukee area businesses remain at healthy levels, according to a business outlook survey conducted by the Metropolitan Milwaukee Association of Commerce (MMAC). Sixty-nine percent of businesses surveyed see rising real sales levels in 2014’s fourth quarter (vs. year ago levels), and a majority (52%) forecast employment gains for their local operations. 

 "Sales and profit expectations for the fourth quarter dipped marginally from those expressed for 2014’s third quarter, but overall levels of business optimism remain healthy," said Bret Mayborne, the MMAC’s economic research director. "Fourth-quarter employment optimism ranked strong, particularly among local manufacturers where nearly two-thirds of those surveyed see fourth-quarter, year-over-year job gains."

Fourth-quarter employment optimism ranked strong, particularly among local manufacturers where nearly two-thirds of those surveyed see fourth-quarter, year-over-year job gains.”

Bret Mayborne
MMAC Director
of Economic Research


Quarterly sales optimism has largely held steady in recent quarters. Currently 69% of surveyed businesses see rising real sales levels for the fourth quarter (vs. 2013's fourth quarter). This percentage is modestly lower than those expressed in the two previous quarters when 72% in each survey predicted future quarterly sales gains. Currently, 13% see declines in fourth-quarter sales levels, while 19% expect no change.

Manufacturers indicated a greater level of confidence in improving fourth-quarter sales levels than non-manufacturers. Seventy-five percent of manufacturers see fourth-quarter sales gains (vs. 2013's fourth quarter), while 64% of non-manufacturers see such increases. A smaller expectation gap exists between large (100 or more employees) and small employers. By employment size, 70% of large companies surveyed see fourth-quarter sales gains vs. 67% among small companies.

Like quarterly sales expectations, profit expectations fell short of third-quarter levels. Sixty-one percent of all businesses surveyed see increases in fourth-quarter profit levels (vs. year ago levels), down from the 66% who predicted third-quarter gains. Fourteen percent see declines in fourth-quarter profits, while 25% expect no change.

Job gains in the metro area have strengthened significantly in recent months. After year-over-year growth averaged less than one percent over 2014’s first three months, gains have averaged over 2.5% in the most recent three month period available (June-July-August). Furthermore job growth has broadened with seven of ten major industry sectors now contributing to metro area job growth.

Survey results suggest that Milwaukee may be poised to build on this strengthening employment trend. Over one half (52%) of all businesses surveyed expect fourth-quarter employment levels to exceed levels posted one year ago. Conversely only nine percent of surveyed businesses predict declining employment levels. Current levels of optimism mark a modest increase over third-quarter expectations when 49% of employers saw third-quarter growth.

Expectations were particularly strong among manufacturers surveyed. Sixty-three percent of manufacturers expect job gains in 2014’s fourth quarter vs. only the 2% predicting job level declines for their local operations. While job optimism among non-manufacturers was notably smaller, those seeing job gains still exceed those predicting declines by over a three-to-one margin (44% see increases vs. 14% expecting declines).

Per employee wage and salary levels have modestly trended upward in recent quarters. Currently employers see wages and salaries increasing by an average of 2.4% over the next twelve months, up marginally from the 2.3% increase forecast in 2014’s third quarter and the 2.2% gain predicted in the year’s second quarter.

Expectations for calendar year 2014 as a whole have moderated since the beginning of the year. Currently 71% of all businesses surveyed predict improved real sales levels for 2014 as a whole. This forecast is down slightly from the 75% who saw 2014 calendar year sales gains at the beginning of 2014. Currently 15% of businesses expect sales declines for the year as a whole, while 14% predict no change.

In the survey’s first look at expectations for the 2015 calendar year, 77% of metro area businesses see real sales gains in 2015 (vs. 2014) while 4% project declines. The remaining 19% see no change. Expectations for 2015 rank modestly higher than the initial forecast for 2014 (given 12 months ago) when 68% of respondents forecast sales gains for the forthcoming calendar year (2014).

Manufacturers are more optimistic toward 2015 real sales increases than non-manufacturers. Eighty-six percent of manufacturers expect gains for the year vs. 70% among non-manufacturers. The split for large vs. small employers was more evenly distributed – 80% of large employers see real sales gains in 2014 vs. 75% for small employers.

The Business Outlook Survey, conducted by the MMAC, contains responses from 113 Milwaukee area firms, both large and small, employing more than 46,100 people.