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Third Quarter Economic Barometer Results
Mankato, MN (November 1, 2016) – The third quarter, July to October, was a little soft economically for Greater Mankato businesses especially in terms of profit which was down for 43 percent of those reporting, according to a survey conducted by Greater Mankato Growth.
Businesses are forecasting a slightly better profit picture in the fourth quarter. For the three-month period compared to the same time last year, 65 percent said revenue was up or the same and employment level was up or the same for 71.4 percent. Capital expenditures were up or the same for 80.9 percent and new customer acquisition level was up or the same for 83.3 percent.
"The fourth quarter has typically been strong for the Greater Mankato marketplace," said John Considine, GMG's Regional Business Intelligence Director. "The projections provided by area businesses align with what we have seen in terms of job growth on an annual basis."
Fourth quarter revenue compared to the same time period in 2015 is forecast to be up or stable for 68.4 percent of respondents and profit up or the same for 60.5 percent. In addition, 77.6 percent report that employment levels should be up or the same while 82.9 percent forecast capital expenditures will be up or the same. New customer acquisition should be up or the same for 82.9 percent.
"The high rate of capital investment should translate into increased revenue and profit going forward," said Considine. "Manufacturing had the highest rate of forecasted capital investment. That doesn’t always mean jobs, but it should result in new efficiencies that will grow our economy in other ways."
Besides the financial landscape, the top business concern - with nearly 79 percent saying it was most important or very important - was the national political scene which was ranked more concerning than the workforce shortage which came in with 74 percent, the same level of concern for labor costs.
The state political scene was also a big concern for 72 percent of area businesses while state permitting and regulation was of top concern to 54 percent; operational costs (without labor) was a concern to 50 percent.
The breakdown by sector:
- Workforce availability (74.7%)
- Transportation and Warehousing, Manufacturing and the Service had the highest rate of concern
- Labor costs (74.7%)
- Construction, Education and Accommodation/Food Service had the highest rate of concern
- State political climate (72%)
- Ag, Construction, Real Estate and Education had the highest rate of concern
- National political climate (78.7%)
- Construction, Finance, Education and Service had the highest rate of concern
On the question of the distance from which they attract present employees, 87.9 percent said they are drawing employees from ten miles or more (with 29.3 percent putting from over 40 miles). In terms of future talent attraction, 78.7 percent said they would pull from ten miles or more while 12 percent saying they didn't know how far they would be pulling.
The GMG Economic Barometer was sent electronically to nearly 2,000 area business leaders from October 14-31 with 87 reporting. The survey included GMG members and non-members as respondents.
About Greater Mankato Growth
Greater Mankato Growth (GMG) is committed to advancing business for a stronger community. As the Chamber of Commerce and Economic Development organization serving the regional marketplace, GMG exists to intentionally develop the regional center by promoting, supporting and serving as a catalyst for economic development through business growth, retention and attraction, talent growth retention and attraction, regional livability and advocacy of the marketplace. Greater Mankato Growth, Inc. includes two affiliates: Visit Mankato, which focuses on visitor attraction and servicing, and the City Center Partnership, which focuses on development in the City Center.
About the Regional Economic Development Alliance
In 2009, the Regional Economic Development Alliance (REDA) began with a progressive group of communities and counties joining together with Greater Mankato Growth in business attraction and development efforts. REDA participants include Eagle Lake, Lake Crystal, Le Sueur, Madison Lake, Mankato, North Mankato, Saint Peter and Blue Earth and Nicollet Counties. By working together, the group is able to efficiently provide regional and individual city and county information to businesses interested in the Greater Mankato marketplace. As a result of promoting the individual strengths of each community, along with the combined assets of the regional marketplace, all experience collective success.