April 29, 2024 – Weakness was expressed by Milwaukee-area businesses toward second quarter economic growth, according to a Business Outlook Survey conducted by the Metropolitan Milwaukee Association of Commerce (MMAC). Forty-four percent of businesses surveyed see sales increases in 2024’s second quarter, 43% see profit gains and 48% expect job gains vs. year-ago levels.
“Businesses surveyed expressed concern about continuing economic growth in future months and that concern was reflected with less than half of those surveyed seeing second quarter growth among the three major metrics – sales, profits and employment,” said Bret Mayborne, MMAC’s economic research director. “On the positive side, manufacturers expressed a higher level of optimism on average, particularly on jobs, giving hope than manufacturing numbers may be turning the corner from weak first-quarter results.”
The trend in sales expectations is mostly downward. Currently 44% of all businesses surveyed predict real sales gains in 2024’s second quarter (vs. year-ago levels), 29% see sales declines and 27% expect no change. The percentage predicting second-quarter growth is down from the 49% who forecast first-quarter gains, and marks three consecutive quarters with quarterly optimism under the 50% mark.
By industry, manufacturers have stronger sales expectations than non-manufacturers. Fifty-seven percent of manufacturers see second-quarter sales growth while 38% of non-manufacturers see such gains. The difference in expectations for firms by employment size is smaller. Among large employers (100 or more employees), 48% forecast second-quarter sales gains vs. 42% for small employers.
Profit expectations were likewise low – 43% of all Milwaukee area businesses see higher profits in 2024’s second quarter (vs. year-ago levels) below the 52% who forecast first-quarter profit gains. Thirty percent of those surveyed see no change in profit levels for the second quarter while 27% predict profit declines.
Opening 2024, employment in the metro area has registered three consecutive months of year over-year decline. Monthly job declines averaged -0.8 over the first quarter, with year-over-year job decreases posted across the majority of major industry sectors.
Unlike sales and profit, job expectations showed improvement from first-quarter levels. Forty eight percent of businesses surveyed expect second-quarter employment gains (vs. year-ago levels), up from the 35% who predicted first-quarter job gains. Currently, one-third of those surveyed (33%) expect no change in employment levels while 19% predict job declines.
By industry, manufacturers are more likely to forecast second-quarter job gains versus year-ago levels than non-manufacturers (57% versus 43% respectively). On the other hand, differences by employment size are marginal. Forty-eight percent of large employers see second-quarter gains versus 47% among small employers.
Future wage and salary expectations fell for the second consecutive quarter. On average, the change in per-person employee wages and salaries is forecast to rise 2.7% over the next 12 months, below the 3.6% and 4.2% annualized increases predicted in the two prior surveys.
Calendar Year 2024 Expectations
For the calendar year, only 46% of businesses surveyed see real sales gains for 2024, 25% see declines while 29% see no change. Three months into the new year, the percentage predicting an annual sales increase marks a notable downgrade from first-quarter expectations when 61% of those surveyed predicted a 2024 sales gain.
2024 Business Concerns
Businesses were asked to rank business concerns in 2024’s second quarter. Among the concerns listed, continuing economic growth and recovery ranked as the most concerning. This was followed by price inflation, labor shortages and supply chain issues.
The Business Outlook Survey, conducted by the MMAC, contains responses from 63 Milwaukee area firms, both large and small, employing more than 13,300 people.
