ALEXANDRIA — Minnesota business services firms are cautiously optimistic about the workforce shortage and inflation easing in the coming year, according to a survey of Minnesota businesses service firms conducted by the Minnesota Department of Employment and Economic Development and the Federal Reserve Bank of Minneapolis.
Results from the random survey of 229 Minnesota business services firms show 68% of respondents believe over the next year labor availability will stay the same, 7% think it will go up and 25% think it will go down, a slight improvement over last year’s responses (62%, 5% and 33%, respectively). However, to attract workers, 53% of respondents anticipate increasing wages by at least 3%.
“The survey backs up the fact that Minnesota’s extremely tight labor market remains a defining feature of our state economy right now, but there are signs the workforce shortage is easing,” Federal Reserve Bank of Minneapolis Regional Outreach Director Joe Mahon said in a press release. “More and more Minnesotans are joining or rejoining the labor force, in some cases attracted by wages that have increased significantly in some fields over the past couple years.”
“At DEED we continue to focus on connecting people looking for work with the employers who need them,” DEED Commissioner Matt Varilek said in a press release. “We’re rolling out new tools and services to do this in the coming months, thanks to legislative support this past session.”
Surveyed firms also show some expectations that key state economic indicators will move in a positive direction in the coming year: 65% expect inflation to continue to go up – but that’s down from 85% in 2022. And 40% expect consumer spending to go down – but that’s an improvement from 43% in 2022.
The Business Services Industry Conditions Survey gauges the sentiments of Minnesota business services firms concerning their own operations, as well as the state economy as a whole. Accounting firms, computer consultants, advertising and public relations agencies and other types of service companies support the activities of other businesses, and their performance is an indicator of overall business conditions and trends across industries and throughout the state.
DEED and the Federal Reserve Bank of Minneapolis have conducted this survey annually since 2006. A detailed report of
the 2023 Survey of Minnesota Business Services Firms
is available on the DEED website.
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