Fourth-Quarter Business Outlook Survey
Published October 24, 2024
| Fourth quarter MMAC business outlook survey |
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MILWAUKEE - Business confidence toward near-term business growth in the metro area’s economy remained weak in 2024’s fourth quarter, according to a business outlook survey conducted by the Metropolitan Milwaukee Association of Commerce (MMAC). Quarterly expectations on sales, profits and employment remain at low levels and trended below third-quarter levels.
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Expectations For 2024's Fourth Quarter:
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"Quarterly optimism – business seeing year-over-year gains in sales, profits and employment – stood below 50% for each metric, historically a sign of economic weakness. With that said, survey results suggest a positive turning point in 2025 with three-quarters of those surveyed seeing sales growth in calendar year 2025."
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Bret Mayborne
MMAC's Vice President - Economic Research
Among all businesses surveyed, 44% see real sales gains in 2024’s fourth quarter (vs. year-ago levels). Twenty-eight percent predict sales declines (vs. 2023's fourth quarter) while 28% expect no change. Firms expecting real sales increases fell marginally from third-quarter levels when 49% forecast quarterly year-over-year increases.
By firm size, large companies are more likely to see fourth-quarter sales gains than small companies. Fifty-three percent of large companies (100 or more employees) surveyed see fourth-quarter sales gains (vs. 2023’s fourth quarter) compared to 38% among small firms. By industry, 54% of non-manufacturers see fourth-quarter sales gains (vs. year-ago levels), while 29% of manufacturers predict such increases.
Profit expectations are somewhat more optimistic than sales forecasts. Overall, 49% of all surveyed businesses see fourth-quarter profit gains (vs. 2023’s fourth quarter), 30% see profit declines and 20% see no change. These expectations are marginally lower than those expressed in 2024’s third quarter.
The employment situation has been weak in 2024. Nonfarm employment levels have declined year-over-year in each of 2024’s first nine months with a year-to-date average decline of -0.5%. These job decreases have been broad-based with declines registered in seven of 10 major industry sectors. On the positive side, the metro area’s unemployment rate has remained low in part because of a smaller labor force.
Fourth-quarter expectations toward future job growth remain tempered with the largest number (49%) of those surveyed seeing no change in fourth-quarter job levels. Currently 29% see employment growth over year-ago levels, the smallest percentage predicting job gains since 2021’s first quarter. Those expecting job increases marginally outnumber those expecting declines (29% versus 22%). The current percentage forecasting employment gains is down from the 42% who forecast job increases three months ago in 2024’s third quarter.
By industry, non-manufacturers and manufacturers are equally likely to forecast fourth-quarter job gains with 29% of both groups seeing year-over-year gains. By firm size, large employers are significantly more likely to predict job increases than small employers by a 41% to 22% margin.
Wage and salary expectations turned upward for the second consecutive quarter. Employers project an average annual increase of 3.3% in per employee wages and salaries over the next 12 months. This forecast average is up from the 2.7% and 3.1% annual increases forecast for employee wages and salaries in 2024’s second and third quarters respectively.
Employers revised calendar year sales expectations downward in 2024’s fourth quarter. With only one quarter remaining, 45% of businesses surveyed predict higher real sales levels for 2024’s calendar year. This forecast is down slightly from the 48% who saw 2024 calendar year sales gains three months ago. Currently 33% of businesses expect sales declines for 2024 as a whole, while 23% predict no change.
The employment situation has been weak in 2024. Nonfarm employment levels have declined year-over-year in each of 2024’s first nine months with a year-to-date average decline of -0.5%. These job decreases have been broad-based with declines registered in seven of 10 major industry sectors. On the positive side, the metro area’s unemployment rate has remained low in part because of a smaller labor force.
Fourth-quarter expectations toward future job growth remain tempered with the largest number (49%) of those surveyed seeing no change in fourth-quarter job levels. Currently 29% see employment growth over year-ago levels, the smallest percentage predicting job gains since 2021’s first quarter. Those expecting job increases marginally outnumber those expecting declines (29% versus 22%). The current percentage forecasting employment gains is down from the 42% who forecast job increases three months ago in 2024’s third quarter.
By industry, non-manufacturers and manufacturers are equally likely to forecast fourth-quarter job gains with 29% of both groups seeing year-over-year gains. By firm size, large employers are significantly more likely to predict job increases than small employers by a 41% to 22% margin.
Wage and salary expectations turned upward for the second consecutive quarter. Employers project an average annual increase of 3.3% in per employee wages and salaries over the next 12 months. This forecast average is up from the 2.7% and 3.1% annual increases forecast for employee wages and salaries in 2024’s second and third quarters respectively.
Employers revised calendar year sales expectations downward in 2024’s fourth quarter. With only one quarter remaining, 45% of businesses surveyed predict higher real sales levels for 2024’s calendar year. This forecast is down slightly from the 48% who saw 2024 calendar year sales gains three months ago. Currently 33% of businesses expect sales declines for 2024 as a whole, while 23% predict no change.
Calendar Year 2025 Expectations
Metro area businesses gave their first look at expectations for the 2025 calendar year in this survey. A strong 75% of metro area businesses see real sales gains in 2025 (vs. 2024) while only 4% project declines. The remaining 22% see no change. Businesses are more optimistic now toward the coming year than they were 12 months ago when 63% of survey respondents forecast sales gains for the forthcoming calendar year (2024).
By industry, manufacturers and non-manufacturers expressed similar levels of optimism toward 2025. For non-manufacturers 76% expect real sales gains for the year versus 74% among manufacturers. On the other hand, large employers expressed a greater level of optimism toward the new year. For large employers surveyed, 88% see real sales gains in 2025 vs. 67% for small employers.
By industry, manufacturers and non-manufacturers expressed similar levels of optimism toward 2025. For non-manufacturers 76% expect real sales gains for the year versus 74% among manufacturers. On the other hand, large employers expressed a greater level of optimism toward the new year. For large employers surveyed, 88% see real sales gains in 2025 vs. 67% for small employers.
2024 Business Concerns
Businesses were asked to rank business concerns in 2024’s fourth quarter. Among the concerns listed, economic insecurity and price inflation rank as the most concerning to those surveyed. Talent attraction/labor shortages and healthcare costs rank as the next most concerning.
The Business Outlook Survey, conducted by the MMAC, contains responses from 83 Milwaukee area firms, both large and small, employing more than 14,200 people.