Milwaukee-area businesses expressed measured optimism toward 2017 according to MMAC’s annual Business Outlook Survey. Seventy-three percent of those businesses surveyed see sales increases, 71 percent predict profit gains and 61 percent expect employment growth in 2017 for their local operations. (jump rest of article to website)
Metro businesses are generally optimistic toward future business prospects, but expectations suggest a slow start to 2017. Overall, expectations for 2017’s first quarter are significantly lower than those expressed for the calendar year as a whole.
Sales expectations among Milwaukee-area businesses have been consistently moderate over the course of the past year. Seventy-three percent of those surveyed expect increases in real sales levels in 2017. Only 7 percent predict sales declines, while the remainder (21 percent) see no change. The proportion predicting 2017 sales growth is similar to both the 75 percent who began 2016 predicting sales increases for that year as a whole, and the 72 percent who forecast 2017 sales gains just three months ago.
Sales optimism is strongest among manufacturers; 77 percent of manufacturers surveyed predict sales growth in 2017, versus 70 percent among non-manufacturers.
Expectations by employer size are more similar. Seventy-four percent of small employers (with fewer than 100 employees) see 2017 sales gains, while 71 percent of large employers have such expectations.
Manufacturers are also more likely to predict rising profit levels. Eighty-two percent of manufacturers see 2017 profit increases, versus 65 percent among non-manufacturers. Overall, 71 percent of all employers surveyed see profit increases in 2017. Conversely, only 9 percent see declining profit levels. The remaining 20 percent see no change.
A moderate growth trend is expected for capital spending plans among Milwaukee employers. The largest number (42 percent) of those surveyed see increased capital spending levels for local operations in 2017. Eighteen percent see capital spending decreases, while 39 percent see no change.
The employment trend in the metro area was on a bit of a roller coaster ride throughout 2016, from slow year-over-year growth over 2016’s first three quarters to employment declines posted in the two most recent months available (October and November). To date, jobs in 2016 are up a modest 0.6 percent, down from the 1.1 percent growth posted in 2015. Nonetheless, businesses overall remain confident that job growth will continue into 2017. A strong majority (61 percent) of businesses expect increases in their local workforces in 2017, with those seeing job increases outnumbering those predicting declines (6 percent) by more than a 10-to-one margin. Thirty-three percent see no change.
Despite a flat manufacturing job trend in 2016, manufacturers are more likely than non-manufacturers to predict 2017 job gains. Currently, 68 percent of manufacturers predict job increases during calendar year 2017, higher than the 57 percent of non-manufacturers who see such gains. By comparison, 49 percent of manufacturers forecast employment increases at the beginning of 2016.
Increases in wages and salaries for area workers in 2017 are expected to be slightly higher than those projected in 2016. The average change in per person employee wages and salaries is forecast to rise 2.9 percent over the next 12 months, up from the 2.5 percent annual increase projected at the opening of 2016.