Wisconsin business leaders are very optimistic about economic conditions in both the U.S. and Wisconsin, despite a lingering labor shortage. According to the summer economic survey conducted by Wisconsin Manufacturers & Commerce, wages are rising, which is likely attributable to federal tax reform, competition for employees and the improving economy.
Eighty-one percent of the 203 survey respondents rate the U.S. economy as strong or very strong, up sharply from 58 percent six months ago. Eighty percent of business leaders rate the Wisconsin economy as strong or very strong, up from 70 percent.
The number of business executives who say the U.S. is headed in the right direction also rose to 86 percent from 77 percent six months ago. Eighty-nine percent say Wisconsin is headed in the right direction, which is unchanged from the previous survey.
Further, 94.5 percent of respondents predict they will be profitable in the next six months, up slightly from 93 percent in December.
Business leaders seem to credit both President Donald Trump and Gov. Scott Walker for the strong national and state economies. Trump’s approval rating jumped from 72 percent in December to 79 percent now. Walker’s rose slightly to 92 percent from 90 percent.
All the optimism is tempered by concerns over workforce and high health care costs. Seventy-six percent say they are having trouble finding workers, which is down from 80 percent six months ago. But, 61.5 percent say that the labor availability is the top public policy issue facing Wisconsin, up from 51 percent in December. Health care was second, as it was in the last survey.
For the first time since at least the end of the Great Recession, a majority (55.5 percent) of business leaders say they expect wages to grow above 3 percent in the next six months. That strong growth could be caused by a combination of factors, including the recently enacted federal tax reform. Seventy two percent of respondents said they will see tax relief as a result of the new law. Of those, 72 percent said they would use the savings to reinvest in their company, while 33 percent planned to increase wages and benefits. Twenty-five percent said they would use the tax savings to hire additional workers.
“The landmark federal tax reform along with other pro-business actions by the Trump Administration seems to be driving the optimism,” said WMC’s Kurt Bauer. “Reversing the expensive and stifling policies of the previous administration isn’t just creating more optimism, it is also increasing employment, wages and driving stronger GDP growth.”
• 60 percent of businesses expect to hire more employees – only 3.4 percent expect to have fewer workers
• The plurality of businesses (40.3 percent) don’t know if losing welfare benefits decreases the job applicant pool, but of those who have an opinion on the matter, 31.5 percent say it does, compared to 24.1 percent who say it doesn’t.
• The majority of WMC members (74.3 percent) strongly disapprove or somewhat disapprove of Tammy Baldwin.
• 45.7 percent of businesses support imposing tariffs, while 35 percent oppose them. But the survey was completed before the latest tariffs on steel and aluminum took effect.