Although the U.S. economy continues to lumber ahead with stagnant job creation, a record trade deficit and a staggering loss of manufacturing jobs, business owners and managers in southeastern Wisconsin remain optimistic about the future of their companies.
Optimism among local businesses remains strong, according to the new Metropolitan Milwaukee Association of Commerce Business Outlook Survey for the second quarter.
Seventy-four percent of businesses surveyed see increased sales levels in the second quarter, up from 70% who predicted sales gains in the first quarter.
Only 11% of the businesses surveyed foresee second-quarter sales declines, while 15% project no changes.
According to the survey, 43% of businesses expect hiring increases in the second quarter, while only 13% project declines and 45% predict no change.
"Second-quarter expectations among area businesses largely matched the optimistic tone set at the beginning of 2004," said Bret Mayborne, the MMAC’s economic research director. "Particularly noteworthy was the optimism expressed by local businesses toward second-quarter job levels, with those seeing second-quarter employment gains outnumbering those expecting declines by over a three-to-one margin."
Even 41% of manufacturers are expecting second-quarter job increases.
The improved local job climate also is contributing to stronger-than-expected wage and salary increases. Local businesses forecast an average increase in per-employee wages and salaries of 2.7% over the next 12 months, up modestly from the 2.6% gain forecast in the first quarter.
In the new survey, 63% are expecting profit gains in the second quarter, compared with the same period a year ago. Only 13% foresee profit declines, and 24% predict no change in profit levels.
The MMAC surveyed executives of 152 local businesses.
Those executives are not whistling past the graveyard, according to William McGinnis Jr., president of W. McGinnis Advisors LLC and Exponential Careers.
McGinnis sees reason for the optimism in both of his professional roles: W. McGinnis Advisors provides litigation support for financial and investment analysis; and Exponential Careers provides executive career counseling.
Thus, McGinnis is hands-on with both investments and the job market.
"It does not surprise me at all. Everything that I see is that there is a nice rebound going on right now," McGinnis said. "These things are always difficult to see. They kind of wade through at the lower levels, but this has been going on for 12 months.
"All of the indications right now are that we’ve come through the downturn, and we’re in a nice, graceful upturn right now. That’s the way you rebound from these things. I’m very optimistic right now," said McGinnis, a former investment banker who was a senior vice president and senior investment analyst at Robert W. Baird & Co., Milwaukee.
The optimism expressed in the MMAC survey, fueled by rising sales and profits, is slowly but surely turning around the hiring outlook among employers, McGinnis said.
"I’m seeing a pickup in the job market, not just locally, but nationally," he said. "There’s a great more interest out there in employers. We’re starting to see more job offers out there right now."