As part of an ongoing effort to track the recovery of the Ninth District economy, the Minneapolis Fed conducted an ad hoc electronic survey of 330 business contacts from around the district (85 percent from Minnesota) in late August.
The results indicate that businesses performed well over the past three months and they expect that to continue for the next three months. Credit conditions have stopped getting worse, as access to bank credit was largely unchanged. Over the past three months, responding firms noted growth in revenue and profits (see table). This was accomplished with a slight increase in employment and space occupied. However, input costs have also risen, squeezing profit margins.
Over the next three months, firms expect revenues and profits to continue growing. “We are seeing growth from some expansion in service offerings. We do not see any likely deterioration, but rather pretty static/slight uptick sort of growth,” commented a Minnesota respondent from the professional services sector. Employment may pick up, as 21 percent expect to increase hiring while 10 percent expect to decrease staff over the next three months. Respondents also expect to incur higher input costs.
Meanwhile, credit market tightness seems to have leveled off, with nearly two-thirds of the respondents seeing no change in access to bank credit.
(The survey is over-weighted to Minnesota; 85 percent of the respondents were from Minnesota while the state represents about 60 percent of the district’s population. However, the results from the other states were similar to the overall results.)