Businesses surveyed by the Metropolitan Milwaukee Association of Commerce expect per-employee wages and salaries to increase by 3.6 percent over the next 12 months.
The increase is the highest in 17 years and was last exceeded by a forecasted 3.8 percent increase in the first quarter of 2001, according to MMAC.
The projected increase is strongest at small companies with less than 100 employees. Those firms, which made up about 55 percent of the 119-company sample, are projecting a 4.1 percent increase in wages. Large firms are forecast to increase wages 3.1 percent.
At 3.6 percent, the projected increase at manufacturing firms is about equal to the 3.7 percent forecast for non-manufacturing firms.
The hiring outlook is also strong, with 61 percent of firms surveyed expecting to see an increase in total employment for the second quarter compared to the same time last year. About one-third of firms expected no change, while 7 percent said total employment would be down.
Companies are also optimistic about their chances for topline growth, with 71 percent predicting year-over-year sales gains after accounting for inflation. The optimism was the same across large and small firms, but manufacturers had a slightly better outlook.
On the bottom line, 66 percent of firms expected year-over-year increases in profits. The outlook was about the same across all firms.
“Most of 2017 was marked by rather unremarkable growth in the metro area,” said Bret Mayborne, MMAC economic research director. “Actual results posted in 2018’s early months and expectations – particularly job expectations – expressed toward future growth suggest that the trend has strengthened.”
The majority, 69 percent, of those surveyed said they’re expecting a sales increase from the first to second quarter of 2018. The optimism was particularly strong among larger firms and manufacturers.
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