Four times a year Greater Mankato Growth distributes a survey to area businesses regarding multiple metrics in order to gather how the economy performed during previous quarter and what businesses project for the upcoming quarter. Additionally, a unique inquiry is posed in each quarter to gain topical insight to the local economy.
Respondents provided feedback on six metrics regarding their business for the First Quarter: Revenue, Profit, Employment Change, Capital Expenditures, R&D Spending and New Customer Acquisition.
Below the overall trend for the economy is presented first for each metric, followed by industries showing noticeable change. Noticeable change means a majority of businesses in that sector responded with “up” or “down.”
Revenue – 74.1% up or same (up 46.6%, same 27.5%). Industries experiencing the most change (up or down) were Finance/Insurance with 55.6% of businesses saying their revenue was up as compared to last year. 42.9% of Construction businesses say their revenue was down compared to last year in the First Quarter.
Profit – 42.7% up. Industries experiencing the most change (up or down) were Information with 50% of businesses saying their revenue was up as compared to last year. 47.8% of Manufacturing businesses also said their revenue was up as compared to last year in the First Quarter.
Employment Change – Steady with little change (same 47.3%). Industries experiencing the most change (up or down) were Construction with 57.1% of businesses saying their employment was down as compared to last year. 46.2% of Retail businesses also said their employment was up as compared to last year in the First Quarter. With the recent closure of some larger retail establishments, this is likely rehiring of employees seeking similar employment within the retail sector.
Capital Expenditures – 81% Up or Same (40.5% Up, 40.5% Same). Retail (61.5%) and Manufacturing (56.5%) saw noticeable positive change in capital investment. There has been 2.5% employment growth in manufacturing the last two months which likely triggered implementation of growth strategies.
R&D Spending – Steady with little change (same 73.3%). No industries had noticeable change.
New Customer Acquisition – 86.9% up or same (up 52.3%, same 34.6%). Several sectors had noticeable positive growth in this metric. Finance/Insurance (77.8%), Information (75%), and Manufacturing (56.5%) all grew. Retail was surprising evenly split (38.5% up, 30.8% down, 30.8% same).
Manufacturing had positive noticeable change in nearly all categories. This aligns with recent employment growth in this sector as shown here.
Second Quarter 2017 Forecast
Revenue, Profit and New Customer Acquisition all have a favorable outlook for the Second Quarter of 2017. Employment Levels, Capital Expenditures, and R&D Spending all are projected to stay the same.
The industry that “bucks” these overall trends is Agriculture (down in Revenue and Profit).
Businesses were asked to rank their level of concern on a scale of 1 -5 (5 being high) among 6 areas: workforce availability, Minnesota regulations/permitting, labor costs, operational costs, state political climate and national political climate. Leading up to and following the Presidential Election, National political climate has been the top concern. Workforce Availability has finally dethroned National Political Climate. The Greater Mankato Business Community has mobilized on this topic and is working to impact labor shortages in a comprehensive manner.
|National political climate||412|
|State political climate||404|
|Operational Costs (w/o labor)||366|
|Minnesota regulation, permitting||341|
Quarterly Questions: “Do you feel workforce housing is a critical issue for Greater Mankato?” AND “Is the lack of workforce housing impacting your ability to hire or retain employees?”
46.7% of businesses say “Yes” it is a critical issue, 28% say no, and 25.2% are unsure.
61.1% of businesses say “No” it is not impacting their ability to hire or retain employees, 13% say yes, and 25.9% are unsure.
Construction was the most impacted industry, with 42.9% of respondents stating it was impacting their ability to hire.
The Greater Mankato Growth Economic Barometer was sent electronically to nearly 2,000 area business leaders from April 13 – May 2 with 104 reporting. The survey included GMG members and non-members as respondents.