For the third consecutive year, most executives at Minnesota’s biggest public companies say the next 12 months are going to be strong for sales, hiring and capital investment.
Our 22nd annual Star Tribune 100 survey of Minnesota’s largest publicly held companies found:
• Eighty-six percent of the responding firms expect their 2013 sales to improve from last year’s. Another 13.5 percent expect sales will be about the same as 2012. None of those responding expect 2013 sales to be worse than last year’s.
• Sixty-three percent of companies said they plan to increase hiring in the next 12 months, up slightly from 57 percent in 2012. Meanwhile, 32 percent will keep head count the same. Just 5 percent plan cuts.
• Fifty-eight percent plan to increase capital expenditures, up from 51 percent in 2012. Just 2.5 percent of responding companies planned to cut spending in the coming year.
The plans for hiring and capital expenditures bode well because both are key indicators of a recovery.
“It’s great news that business seems cautiously optimistic in terms of hiring, and it seems consistent with other information that the economy has been growing and getting stronger,’’ said David Vang, professor of finance at the University of St. Thomas. “A necessary condition of being an entrepreneur is that you have to be optimistic.’’
The Star Tribune conducted the survey in February and March. Of 114 publicly held, Minnesota-based companies that got surveys, 43 responded.
The plans for hiring came from a diverse group of companies, ranging from giant UnitedHealth Group to Rochester Medical, all-terrain vehicle makers Polaris and Arctic Cat, and manufacturer Graco.
Retail and services companies planning to hire include Granite City Food & Brewery and Select Comfort, maker of the Sleep Number bed.
But even as the recovery gains traction and stock market indexes hit all time highs, two issues rank of highest concern: the economy and the ability to hire and retain workers.
The A-list of corporate concerns also includes federal tax rates, health care benefits, energy costs, regulatory enforcement and state tax rates.
But wage rates? Not so much. Wages rank sixth on the public policy issues scale (Question 1), followed by education and transportation.
“We still have quite a few people out of work,’’ said Chris Puto, dean of Opus College of Business at the University of St. Thomas. “There is no real wage inflation.’’
Vang agrees: “I think most companies think that wages and salaries are not going to be big [additional] costs for them.’’