New survey highlights optimism for Minnesota businesses

ST. PAUL — Minnesota business services firms expect improved profits, productivity and job growth over the next 12 months, according to a survey conducted by the Minnesota Department of Employment and Economic Development and the Federal Reserve Bank of Minneapolis.

More than half of respondents expect sales revenue, profits, productivity and employment to increase or stay the same in Minnesota over the next year, according to the survey. Two-thirds of firms expect labor availability to stay about the same, while nearly 65% anticipate raising wages by at least 3% to attract workers during Minnesota’s labor shortage.

On inflation, 56% of respondents expect it to rise over the next year, but that figure is down from 65% in last year’s survey, reflecting cautious optimism about slowing price increases.

“Businesses are optimistic about Minnesota’s economic outlook. Our employers have added jobs eight of the last 12 months and dozens of businesses have announced expansions in our state, including major companies like Meta, Polar Semiconductor and Solugen,” said DEED Commissioner Matt Varilek, in a news release.

“We’re working hard to address businesses’ concerns about our economy, especially the labor shortage, as we aim to keep Minnesota among the top states for business.”

CNBC recently ranked Minnesota the sixth best state for business in the country.

“This survey partnership with DEED provides us with on-the-ground intelligence about the business conditions and expectations for inflation and hiring that is key to our understanding of the national economy,” said Joe Mahon, Regional Outreach Director for the Federal Reserve Bank of Minneapolis.

The Business Services Industry Conditions Survey gauges the sentiments of Minnesota business services fir ms 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.

This year’s survey included responses from 141 businesses.

DEED and the Federal Reserve Bank of Minneapolis have conducted this survey annually since 2006. A detailed report of the 2024 Survey of Minnesota Business Services Firms is available on the DEED website.

Job vacancy surveyDuring 2023, employers reported a total of 139,059 vacancies, down 24.7% from second quarter 2022. This was the fifth-highest number of vacancies on record in Minnesota dating back to 2001. However, it is well down from the previous two years, 2021 and 2022, when the labor markets in Minnesota and the nation were bouncing back from the Pandemic Recession.

Regional Findings

Regionally, 78,325 or 56.3% of all job vacancies were located in the sevencounty Twin Cities metro area, while the remaining 60,734 vacancies, or 43.7%, were located in Greater Minnesota in 2023. Compared to one year ago, the number of job vacancies decreased by 20.3% in the Twin Cities and 29.6% in Greater Minnesota.

As in past years, the job vacancy rate was higher in Greater Minnesota (5.8%) than in the Twin Cities (4.6%), with both regions exhibiting tight labor markets. The Twin Cities had a ratio of 0.6 unemployed persons to every one job vacancy, while Greater Minnesota had a slightly higher ratio at 0.7 unemployed persons to every one job vacancy.

Findings by Industry, Occupation and Size

Statewide, the Health Care & Social Assistance industry had the most job vacancies with more than 36,000 openings, followed by Retail Trade with almost 24,000 vacancies, Accommodation & Food Services with 18,600 postings, and Manufacturing with almost 11,800 vacancies. Combined, those four industries accounted for almost two-thirds of the total openings in the state (see Figure 2).

Three industries had a job vacancy rate that was higher than the state’s (5.1%): Accommodations & Food Services had the highest vacancy rate of any industry at 8.6% followed by Retail Trade at 8.4% and Health Care & Social Assistance at 7.3%.

Three industries saw an increase in job vacancies over the year including Public Administration, Utilities, and Management of Companies & Enterprises. The remainder saw decreases with the largest in Health Care & Social Assistance, Accommodation & Food Services, Manufacturing, Retail Trade, Educational Services, Finance & Insurance, Administrative & Waste Services, Professional & Business Services and Transportation & Warehousing.

Occupations By occupational group, Food Preparation & Serving had the most job vacancies with just over 20,100 postings and a vacancy rate of 9.3%, followed by Sales & Related with 18,100 vacancies and a vacancy rate of 7.6%, Healthcare Practitioners & Technical with just over 15,100 openings and a vacancy rate of 8.1%, Healthcare Support with almost 11,400 openings and vacancy rate of 7.0% and Transportation & Material Moving with 9,500 openings and a vacancy rate of 4.2%.

Five occupational groups saw small increases compared to second quarter 2022: Internships, Apprenticeships, Protective Service, Legal and Community & Social Service occupations. All other groups saw losses compared to second quarter 2022, with the largest declines in Food Preparation & Serving, Sales & Related, Production, Healthcare Support, Transportation & Material Moving, Healthcare Practitioners & Technical and Building & Grounds Cleaning & Maintenance occupations.

The 10 detailed occupations with the most job vacancies during 2023 were Retail Salespersons with 7,599 vacancies and a vacancy rate of 11.4%, Personal Care Aides with 5,669 vacancies, Fast Food & Counter Workers with 5,648 vacancies with a vacancy rate of 10.5%, Registered Nurses with 4,382 vacancies and a vacancy rate of 6.9%, First-line Supervisors of Food Prep and Serving Workers with 4,156 vacancies and a vacancy rate of 24.4%, Cashiers with 3,334 vacancies and a vacancy rate of 5.8%, First-Line Supervisors of Retail Sales Workers with 3,075 vacancies and a vacancy rate of 16.1%, Nursing Assistants with 2,591 vacancies and a vacancy rate of 10.4%, Heavy & Tractor-Trailer Truck Drivers with 2,299 vacancies and a vacancy rate of 6.5% and Stockers & Order Fillers with 2,259 vacancies and a vacancy rate of 5.4%.

Trends in Wage Offers

The median (50th percentile) wage offer for all job vacancies is $19.68 per hour in 2023. This is easily the highest median wage offer in the history of the Job Vacancy Survey, reflecting both employers offering higher starting wages and a changing mix of available occupations. As Figure 4 illustrates, wage offers are highly correlated with experience and education requirements.

Which Occupations Are in Demand?

Jobseekers and employers want to know who is hiring and for what fields of work. Job vacancy counts alone are not a complete picture of labor market demand since larger occupations tend to have higher numbers of vacancies. Occupations in Demand (OID) provides a ranked list of occupations currently in demand, along with links to occupational descriptions, wages and programs of study. Lists are available for Minnesota as well as the 6 sub-state planning regions. These lists use measures of demand from Job Vacancy Survey statistics as well as other sources of data including Unemployment Insurance claimants and Occupational Employment & Wage Statistics.

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