Business executives are optimistic about the state’s economic future over the next decade but less so about the short-term outlook, according to the Business Barometer Survey released today by the Minnesota Chamber of Commerce.
Minnesota’s business leaders “don’t see where we’re coming out of the recession very quickly, but they’re pretty optimistic about Minnesota in the long term,” says Todd Rapp, president of the Himle Horner public relations firm, which conducted the seventh annual poll of 350 business owners and managers for the Chamber.
Optimism about the economy’s long-term prospects was expressed by 79 percent, with 18 percent pessimistic. But even the long-term optimism was offset by a split decision on the near-term outlook: About 30 percent see the state’s economy improving while a similar percentage believe it is worsening.
Less than 20 percent report they are more profitable than last year, with 30 percent less profitable.
Uncertainty about taxes and health care are the leading factors standing in the way of the state’s economic recovery, the Chamber reports. “It’s all an issue of uncertainty,” Rapp says. “They [poll respondents] don’t really understand right now what the playing field is going to be like in a year or two. That’s why they’re saying they’re not confident yet, not ready to expand in Minnesota.”
Sixty-four percent cite taxes as the top barrier to job creation and 29 percent cite the cost of health care. Slightly more than 40 percent of employers, as well as Minnesota Chamber members polled, say Minnesota is emerging more slowly than other states from the recession.
Forty-six percent say their tax burdens are increasing. Health care (54 percent) and taxes and spending (39 percent) also rank as the top two issues they want the governor and lawmakers to address. These two issues have ranked at the top since the Business Barometer began in 2004, according to the Chamber.
Rapp credits the annual Business Barometer Survey as a better prognosticator than many formal economic indicators: “These guys are a pretty good barometer of the economic condition of the state. … In the summer of 2008, the Business Barometer showed that business owners and managers were extremely pessimistic about the direction the economy was going — and within a few short months, the economy collapsed and their fears were proven correct.”
Other survey highlights include:
- Sixty-three percentof business owners and managers believe that teacher training and evaluation must be improved while a majority agreed that most Minnesota teachers are well qualified.
- Seventeen percent of employers and 25 percent of Minnesota Chamber members identified government redesign as a key issue, placing it fourth among issues that business wants the next governor and Legislature to address.
- By a margin of 61 percent to 14 percent, business owners and managers support alternative licensing for teacher candidates. (The Minnesota Chamber has been supporting alternative pathways for college graduates and midcareer professionals without a traditional teaching degree.)
- Respondents express a growing concern that energy cost and reliability could prevent future business expansion.
- Most poll respondents describe Minnesota as an attractive business location where they can effectively compete with businesses in other states.
“Some statistics suggest that Minnesota may be turning the corner and starting our economic recovery. But the Business Barometer demonstrates that this perception is trumped by the reality of a lack of business confidence,” said David Olson, Minnesota Chamber president, in a prepared release. “Business owners and managers want to invest in Minnesota, but there continues to be too much uncertainty in government policy at the state and federal levels for those investments to be made. It’s imperative that policy-makers take steps to place Minnesota employers on a competitive playing field.”
The Minnesota Business Barometer Survey polled 350 Minnesota businesses with at least five employees. It was conducted in June and July with a plus-minus margin of 5.3 percent.
The Minnesota Chamber represents 2,400 businesses on state public policy and regulatory issues.