Heading into the third quarter, area business leaders are more optimistic than they were a year ago, based on the results of the Metropolitan Milwaukee Association of Commerce’s quarterly business outlook survey.
The survey contains responses from 100 Milwaukee-area firms, both large and small, that employ a total of more than 30,750 people.
Based on the results of the survey:
- 70 percent expect higher sales in the third quarter, up from 65 percent a year ago.
- 66 percent expect higher profits in the third quarter, up from 58 percent a year ago.
- 61 percent are forecasting employment gains, up from 44 percent who did so a year ago.
“The economic mood among metro area businesses remains generally positive, with expectation levels pointing toward continuing growth in 2017’s third quarter,” said Bret Mayborne, the MMAC’s economic research director. “Despite the metro area’s lackluster job trend over 2017’s first five months, businesses remain optimistic toward the possibility of future employment growth in their local operations.”
This is the first time since the third quarter of 2015 that 70 percent or more of survey respondents predicted sales gains in two consecutive quarters. In the last MMAC survey, 75 percent of area businesses said they expected sales gains during the second quarter.
Only 6 percent of area businesses expect third quarter sales declines and 24 percent expect no change.
The number of businesses predicting third quarter profit growth (66 percent) was higher than in the second quarter survey, when 62 percent predicted profit growth.
Only 4 percent expect third quarter profit declines, while 30 percent expect no change in profit levels.
The expectations for job growth (61 percent) also improved from the second quarter, when 55 percent expected employment growth.
Only 10 percent predicted employment declines in the third quarter.
In a separate MMAC report, the metro Milwaukee economy showed improvement in May, as 16 of 22 of the economic indicators tracked by the association posted year-over-year increases, up from just 11 improved indicators in April. The May report is the most recent of the MMAC’s monthly economic indicator reports.
“A primary factor in this upgrade was an improving employment trend, both overall and across a majority of industry sectors,” Mayborne said.
The number of jobs in the metro area rose 0.3 percent in May after falling 0.5 percent in April. The education and health services sector had the biggest employment gain in the area, up 1.6 percent in May.
The number of unemployed people in the area was down 26.8 percent in May, to an average of 25,400. New unemployment compensation claims were down 6.4 percent.
The Milwaukee area’s seasonally unadjusted unemployment rate was 3.1 percent in May, down from 4.2 percent a year ago. The state’s unadjusted unemployment rate for May was 2.8 percent, and the nation’s was 4.1 percent.