| Second quarter MMAC business outlook survey |
Second Quarter Business Outlook Survey
April 12, 2019 – Continuing gains in metro area business activity are forecast in 2019’s second quarter, according to a Business Outlook Survey conducted by the Metropolitan Milwaukee Association of Commerce (MMAC). Sixty-six percent of businesses surveyed see sales increases in 2019’s second quarter, 57% see profit gains and 47% expect job gains vs. year-ago levels.
“The levels of optimism expressed on sales, profit and employment are modest by historical standards,” said Bret Mayborne, MMAC’s economic research director. “Nonetheless results of the second quarter survey are at levels consistent with what would be expected in a growth environment in the metro area.”
The trend in sales optimism is somewhat mixed. Currently 66% of all businesses surveyed predict real sales gains in 2019’s second quarter (vs. year-ago levels), 13% see sales declines and 21% expect no change. While the percentage predicting second-quarter growth is up marginally from the 62% who forecast first-quarter gains, it is down from levels of quarterly optimism expressed throughout 2018’s four quarters.
By industry, manufacturers have stronger sales expectations than non-manufacturers. Seventy-six percent of manufacturers see second-quarter sales growth while 61% of non-manufacturers see such gains. Results also indicated a difference in expectations among large employers (100 or more employees) and small employers. Seventy percent of large employers forecast second-quarter sales gains vs. 64% for small employers.
Regarding profits, 57% of all Milwaukee area businesses see higher profits in 2019’s second quarter (vs. year-ago levels), similar to the 58% who forecast first-quarter profit gains. A higher than normal percent of those surveyed (33%) see no change in profit levels for the second quarter while 11% predict profit declines.
The employment situation in metro Milwaukee has settled into a pattern of consistent but moderate job growth in the past two years. Since January 2017, nonfarm employment growth has averaged 0.6% (year-over-year), lower than the 1% average increase registered over the course of the entire economic growth period (2011 to current).
Survey results suggest that this pattern is likely to continue in the near-term. Forty-seven percent of businesses surveyed expect second-quarter employment gains (vs. year-ago levels), while nearly an equal amount (46%) expect no change in employment levels. On the other hand, only 7% of those surveyed predict job declines. Second-quarter expectations rank higher than the 41% of businesses who forecast first-quarter gains.
By employment size, large employers – with 59% seeing second-quarter 2019 gains – are more likely to predict employment growth than small employers – where 38% see gains. By industry, 49% of non-manufacturers predict second-quarter job gains (vs. year-ago levels), higher than the 44% of manufacturers who forecast growth.
Future wage and salary expectations rose modestly over the quarter. On average, the change in per person employee wages and salaries is forecast to rise 3.1% over the next 12 months, above the 2.9% annualized increase predicted three months ago.
April 12, 2019 – Continuing gains in metro area business activity are forecast in 2019’s second quarter, according to a Business Outlook Survey conducted by the Metropolitan Milwaukee Association of Commerce (MMAC). Sixty-six percent of businesses surveyed see sales increases in 2019’s second quarter, 57% see profit gains and 47% expect job gains vs. year-ago levels.
“The levels of optimism expressed on sales, profit and employment are modest by historical standards,” said Bret Mayborne, MMAC’s economic research director. “Nonetheless results of the second quarter survey are at levels consistent with what would be expected in a growth environment in the metro area.”
The trend in sales optimism is somewhat mixed. Currently 66% of all businesses surveyed predict real sales gains in 2019’s second quarter (vs. year-ago levels), 13% see sales declines and 21% expect no change. While the percentage predicting second-quarter growth is up marginally from the 62% who forecast first-quarter gains, it is down from levels of quarterly optimism expressed throughout 2018’s four quarters.
By industry, manufacturers have stronger sales expectations than non-manufacturers. Seventy-six percent of manufacturers see second-quarter sales growth while 61% of non-manufacturers see such gains. Results also indicated a difference in expectations among large employers (100 or more employees) and small employers. Seventy percent of large employers forecast second-quarter sales gains vs. 64% for small employers.
Regarding profits, 57% of all Milwaukee area businesses see higher profits in 2019’s second quarter (vs. year-ago levels), similar to the 58% who forecast first-quarter profit gains. A higher than normal percent of those surveyed (33%) see no change in profit levels for the second quarter while 11% predict profit declines.
The employment situation in metro Milwaukee has settled into a pattern of consistent but moderate job growth in the past two years. Since January 2017, nonfarm employment growth has averaged 0.6% (year-over-year), lower than the 1% average increase registered over the course of the entire economic growth period (2011 to current).
Survey results suggest that this pattern is likely to continue in the near-term. Forty-seven percent of businesses surveyed expect second-quarter employment gains (vs. year-ago levels), while nearly an equal amount (46%) expect no change in employment levels. On the other hand, only 7% of those surveyed predict job declines. Second-quarter expectations rank higher than the 41% of businesses who forecast first-quarter gains.
By employment size, large employers – with 59% seeing second-quarter 2019 gains – are more likely to predict employment growth than small employers – where 38% see gains. By industry, 49% of non-manufacturers predict second-quarter job gains (vs. year-ago levels), higher than the 44% of manufacturers who forecast growth.
Future wage and salary expectations rose modestly over the quarter. On average, the change in per person employee wages and salaries is forecast to rise 3.1% over the next 12 months, above the 2.9% annualized increase predicted three months ago.
Calendar Year 2019 Expectations
For the calendar year as a whole, 77% of businesses surveyed see real sales gains for 2019, 9% see declines while 14% see no change. The percentage currently predicting an annual sales increase marks an upgrade from those expressed three months ago when 72% of those surveyed predicted a 2019 sales gain.
The Business Outlook Survey, conducted by the MMAC, contains responses from 105 Milwaukee area firms, both large and small, employing more than 37,900 people.
The Business Outlook Survey, conducted by the MMAC, contains responses from 105 Milwaukee area firms, both large and small, employing more than 37,900 people.