Minnesota business services firms expect continued recovery from the pandemic recession during the next four quarters, according to a recent survey from the Minnesota Department of Employment and Economic Development.
According to the department on Monday, July 12, 55% of survey respondents are expecting increase in consumer spending and 46% are anticipating growth in employment.
The joint Business Services Industry Conditions Survey was conducted in May and June by DEED and the Federal Reserve Bank of Minneapolis.
Surveying business services firms – such as engineers, accountants and architects –offers a compelling glimpse into economic conditions because these businesses provide their services to other businesses across the full range of industries in the economy. This year, 201 Minnesota business services firms responded to the survey. Most of those business services firms surveyed expect unchanged or improving conditions for the coming year.
Areas of concern among survey respondents include inflation and labor availability. Nearly 75% of respondents believe there will be an increase in inflation and 96% expected unchanged or decreased labor availability over the coming year.
"While Minnesota is showing promising signs of economic recovery, labor availability issues are a real concern," DEED Commissioner Steve Grove said in a statement. "We're continuing to work with Minnesota businesses to help them find the employees they need to grow and thrive. Matching available workers with available jobs – many of them requiring new skills or in different geographic areas – will take some time."
New pandemic related questions were added to the survey this year and last year. A significant share of respondents stated that they allowed employees to work from home (48%), but the percentage was lower compared to the year before (64%). In a related question, 44% of respondents indicated they have returned to work in-person since January 2021, however 22% of respondents indicated that they will allow employees to telework permanently.
In addition to looking forward to the coming year, the survey also asked respondents about the previous 12 months. The pandemic had a particularly negative effect on business services profits and revenue, with more than 50% of respondents experiencing a decline. And, 34% indicated reduced employee productivity.