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 the 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. A noticeable change means a majority of businesses in that sector responded with “up” or “down.”
Revenue – 77% up or same (up 55%, same 22%). Industries experiencing the most change (up or down) were Manufacturing with 58.3% of businesses saying their revenue was up as compared to last year. 44.4% of Professional Service businesses say their revenue was down compared to last year in the First Quarter.
Profit – 49% up. Industries experiencing the most change (up or down) were Manufacturing with 66.7% of businesses saying their revenue was up as compared to last year.
Employment Change – Steady with little change (same 47.3%). 39% of industries were up and only 14% of industries were down. 58.3% of Manufacturing businesses were up and 40% of Healthcare businesses were up.
Capital Expenditures – 85% Up or Same (37% Up, 48% Same). Manufacturing (58.3%) saw a noticeable positive change in capital investment.
R&D Spending – Steady with little change (same 67%). 50% of Manufacturers increased their R&D investments.
New Customer Acquisition – 86% up or same (up 51%, same 35%). Several sectors had noticeable positive growth in this metric. Finance/Insurance (58.3%), Health Care (80%) and Manufacturing (50%) all grew.
Manufacturing was positive in nearly all metrics.
Second Quarter 2017 Forecast
Revenue – Ag and Manufacturing had the most positive outlook, 44% of Professional/Tech service businesses forecast a decline.
Profit – Manufacturing and Healthcare have the most positive outlook.
New Customer Acquisition – All industries predicted growth or remaining steady.
Employment Levels – Manufacturing predicted growth, while the remaining industries forecasted to be the same.
Capital Expenditures – Forecasted to remain the same.
R&D Spending – Forecasted to be the same.
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. For the second quarter in a row, Workforce Availability is the top concern. The Manufacturing sector, which reported many positive metrics this quarter, overwhelmingly recognized this as their top concern. This infers that Manufacturing industry growth could continue as long as employees can be found.
The Greater Mankato Business Community has mobilized on this topic and is working to impact labor shortages in a comprehensive manner.
|National political climate||227|
|Minnesota Regulations, permitting||214|
|State political climate||213|
Quarterly Questions: “Of your workforce need, which category is the most pressing?” and “Of that workforce need, what level of education is necessary?”
There were four categories to choose from for the first question: entry labor, skilled labor, technical specialists, experienced specialists, other.39% of businesses replied that “experienced specialists” was the most pressing need.
There were four categories to choose from for the second question: high school or equivalent, two-year education or certificate, four-year degree or higher, just experience in position regardless of education. 40.6% of businesses specified that “four-year degree or higher” was the necessary level of education for their most pressing need.
Below is the breakdown of needs by industry:
Ag – Experienced Specialists
Manufacturing – Entry labor or Skilled labor
Retail – Entry labor
Information – Skilled labor and some experienced specialists
Finance and Insurance – Experienced specialists
Professional/Technical Services – Experienced Specialists
Educational services – mix of skilled labor and technical specialists
Health Care – Mix of everything
Arts/Entertainment – Mix of entry labor and Other
Accommodation and food service – Entry labor
Other services – Mix of everything
The Greater Mankato Growth Economic Barometer was sent electronically to nearly 2,000 area business leaders from July 27 – August 7 with 62 reporting. The survey included GMG members and non-members as respondents.