Second Quarter, 2014

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

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April 14, 2014 - Milwaukee area businesses are generally optimistic toward 2014’s second quarter, according to a Business Outlook Survey conducted by the Metropolitan Milwaukee Association of Commerce (MMAC). Seventy-two percent of businesses surveyed see sales increases in 2014’s second quarter, 57% expect profit increases and over 40% predict job gains for the new quarter.

"Quarterly sales optimism among area businesses improved for the fourth time in the past five quarters, from a post-recession low of 49% in 2013’s first quarter to the current 72%," said Bret Mayborne, MMAC’s economic research director. "While sales expectations are at levels expected in a solid growth environment, the levels of optimism expressed on profits and employment are a bit more tepid."

"Quarterly sales optimism among area businesses improved for the fourth time in the past five quarters, from a post-recession low of 49% in 2013's first quarter to the current 72%."

Bret Mayborne
MMAC Director
of Economic Research


Seventy-two percent of those surveyed expect second-quarter real sales gains (vs. 2013's second quarter), 9% see sales declines, and 19% expect no change. The current percentage predicting a quarterly sales increase is up from the 67% who forecast first-quarter sales gains (vs. 2013’s first quarter) three months ago and marks the first time in two years that positive quarterly sales expectations exceeded 70%.

Non-manufacturers are particularly optimistic on future sales levels. Seventy-five percent of non-manufacturers surveyed see improved real sales levels in 2014’s second quarter, seven percentage points higher than the level of optimism expressed by manufacturers (68% see sales increases). By size, large employers (100 or more employees) are more likely to forecast second-quarter sales gains than small companies (80% of large employers see gains vs. 63% for small employers).

Profit forecasts remain rather modest. Fifty-seven percent of all Milwaukee area businesses see higher profits in 2014’s second quarter (vs. year-ago levels), up modestly from the 54% who forecast first-quarter, 2014 profit gains. Currently 13% predict profit declines while 30% see no change.

 The current employment situation in the metro area represents somewhat mixed results. On the one hand local jobs have posted 41 consecutive months of year-over-year growth. Yet gains posted in 2014 to date have been uneven – a 1.5% gain posted in January was followed by 0.4% growth in February (latest available). Also current job gains are top heavy, led largely by the education & health and government sectors. Recent declines continue in the manufacturing sector which has posted nine consecutive months of year-over-year job decline.

Survey results suggest that employment gains are likely to continue in the near term. While the largest percentage of all businesses surveyed (46%) see no change in second quarter job levels for their local operations, those seeing job gains (41%) outnumber those expecting declines (12%) by over a three-to-one margin. Second-quarter expectations are down from the 48% of businesses who forecast first-quarter employment gains.

Manufacturers and non-manufacturers have similar employment expectations. Forty-three percent of manufacturers predict second-quarter job gains (vs. year-ago levels) while 41% of non-manufacturers see such gains. Job expectations by employment size are likewise balanced. Forty-two percent of small employers see second-quarter 2014 gains vs. 41% of large employers.

Forecast future wage & salary increases weakened in 2014’s second quarter. On average, the change in per person employee wages and salaries is forecast to rise 2.2% over the next 12 months, below the 2.6% annualized increase predicted three months ago.

Sales projections for 2014 as a whole are similar to expectations expressed three months ago. Currently, 74% of businesses surveyed see real sales gains for calendar year 2014; only 7% see declines while 19% see no change. The percentage predicting sales gains is down only one percentage point from the 75% who forecast 2014 increases at the beginning of the year.

The Business Outlook Survey, conducted by the MMAC, contains responses from 123 Milwaukee area firms, both large and small, employing more than 44,350 people.