Milwaukee-area businesses expect the economic growth experienced by the metro area in 2005 to continue in 2006, according to the Metropolitan Milwaukee Association of Commerce (MMAC) Business Outlook Survey.
"2005 marked a re-establishment of economic growth in the metro Milwaukee area," said Brett Mayborne, the MMAC’s economic research director. "Results from the MMAC’s 2006 first quarter business outlook survey suggest a continuation of these gains."
However, surveyed companies’ predictions for 2006 sales increases are slightly lower than the sales levels they had predicted for 2005. Seventy-eight percent of Milwaukee businesses are predicting sales increases in 2006, down from the 84 percent who had predicted such increases for 2005.
Seventy-four percent of Milwaukee companies are predicting 2006 profit gains, and 54 percent expect employment growth for their local operations.
"Particularly encouraging was the continuing optimism expressed among manufacturers surveyed toward the coming year," Mayborne said.
Eighty-five percent of manufacturers predicted sales growth in 2006, while 75 percent of non-manufacturers see an increase.
Manufacturers also predict greater profit increases in the coming year than non-manufacturers. Eighty-two percent of manufacturers are expecting profit increases in 2006, while only 69 percent of non-manufacturers have such expectations.
Additionally, larger companies (100 or more employees) are looking at slightly greater sales gains than their smaller counterparts. Eighty percent of larger employers are forecasting 2006 sales gains, compared with 77 percent of small employers.
Companies are split on their capital spending plans. Forty percent of businesses surveyed forecast a rise in capital expenditures for 2006, while another 40 percent predict that there will be no change. Twenty percent believe their capital spending will decline.
Employment is expected to increase as well, based on the survey results. Sixty-two percent of manufacturers predict job increases during 2006, similar to the 63 percent increase predicted in 2005. In the first quarter, 46 percent of businesses are predicting job gains and 13 percent anticipate declines.
Businesses expect that wages for jobs will increase an average of 3.2 percent.
The salary increase may be necessary, as 77 percent of companies are predicting inflation rates of 3 to 5 percent.
The Business Outlook Survey, conducted by the MMAC, contains responses from 108 Milwaukee-area firms, both large and small, employing more than 70,900 people, and is first reported exclusively in Small Business Times.
Small Business Times, December 16, 2005, Milwaukee, WI
