For the second 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 annual Star Tribune 100 survey of Minnesota's largest publicly held companies found:

•Eighty-three percent of the responding firms expect their 2012 sales to improve from last year's. Another 17 percent expect sales will be the same as 2011, and none of those responding expect 2012 sales to be worse than last year's.

•Fifty-seven percent of companies said they plan to increase hiring in the next 12 months, down slightly from 64 percent in 2011. Meanwhile, 39 percent will keep headcount the same and just 4 percent plan cuts.

•Fifty-one percent plan to increase capital expenditures -- the same as last year. Just 12 percent of responding companies planned to cut spending in the coming year.

The optimistic plans for hiring and capital expenditures bode well because both are key indicators of a recovery.

"It's not full steam ahead,'' said Chris Puto, dean of the Opus College of Business at the University of St. Thomas. "It's just being strategic. [But] 88 percent are spending on capital, and nearly 60 percent are going to increase headcount.''

Regardless of the persistent worries over the economy, these companies seem willing to take the same gamble they made a year ago when four out of five also said they expected higher sales in 2011.

"I thought that was a 'wow,''' Puto said. "And it's reflected in last year's financial results. They were right.''

The Star Tribune conducted the survey in February and March. Of 121 large, publicly held Minnesota-based companies that got surveys, 51 responded.

The plans for hiring came from a diverse group of companies, ranging from food company giant General Mills to medical device maker Vascular Solutions. Manufacturing companies planning to add workers include industrial filter maker Donaldson, coatings equipment maker Graco and all-terrain vehicle makers Arctic Cat and Polaris.

Retail and services companies planning to hire include coffee chain Caribou and brew pub chain Granite City Food & Brewery. In the health care field, diagnostics maker SurModics; Rochester Medical, which makes urinary care products; and Uroplasty, which makes devices to aid voiding dysfunctions, all plan to add employees in the coming year. Dental and veterinary products maker Patterson Cos. also is looking to hire.

Continued concern

But even as the recovery takes hold, memories of the deep 2008-09 recession mean the economy remains the No. 1 concern of Minnesota companies.

But most companies ranked wage rates toward the bottom of their A-list of biggest worries.

"That's a positive sign for the economy going forward, '' said David Vang, professor of finance at St. Thomas.

And it may explain the hiring that occurred last year, when the Star Tribune 100 companies added a net 57,292 jobs.

"They put the blinders on and charged ahead,'' Vang said. "There is a uniform belief that sales will stay the same or go up.'' And most companies seem willing to make the investment in capital and labor to capture their share, he said.

The Toro Co., for example, made a major capital investment last year in a Romanian manufacturing facility.

General Mills said it is continuing to invest in capital projects "at approximately the same rate ... and increasing somewhat with sales growth.''

Yet this confidence is fragile. Volatile financial markets and political gridlock dominated the headlines during the second half of 2011. Asked if this uncertainty affected corporate spending or hiring last year, half of respondents effectively said "no'' while the other half either put spending and hiring on hold or made cuts.

"That's a 50-50 split,'' Vang said. "And pretty much corresponds to what you get when you have uncertainty.''

Besides the economy, first-tier concerns included hiring and retaining workers; increased regulatory requirements; health care benefits; federal and state tax rates, and education. Wage rates ranked at the bottom of their first-tier concerns.

Second-tier concerns include global competition, energy costs, the Minnesota economy, the housing slump and privacy regulations. Terrorism and climate change ranked last.

As the financial crisis spread in 2008 and 2009, access to credit dried up even for the most creditworthy companies. That problem seems to have gone away, at least for these larger, publicly held companies.

Seventy-six percent said their access to credit was "about the same'' today as it was a year ago, while 22 percent said they had more access to credit. Just 2 percent reported they had less access to capital, down from 7 percent a year ago.

Government intervention

Asked what the "single most important thing that federal and state government can do to help your company grow and add more employees," 57 percent chose "lower taxes.''

General Mills: "The U.S. has the second-highest corporate tax rates in the world, and Minnesota's corporate tax rate is above the U.S. average.''

Medical products maker SurModics said: "Reduce government regulation.''

Aetrium, which makes electromechanical equipment, said: "Stimulate economic growth.''

Health care debate

Twenty percent of responding companies said they wanted the Obama affordable health care act revisited, up from 8 percent a year ago. (The act is under review by the U.S. Supreme Court, with a decision expected in June.)

Seventy percent of respondents agreed that high-deductible health plans and health savings accounts (HSAs) "are helping to reduce health care costs." Thirty percent disagreed.

These plans generally push health care decisions down to consumers by requiring them to pay for the first several thousand dollars in annual medical expenses beyond preventive care.

Here's what companies had to say about health care.

Vascular Solutions: "High-deductible plans force consumers [employees] to make informed decisions on their medical care.''

Caribou Coffee said such plans "make health consumers more active in their own health care choices.''

General Mills disagrees that high-deductible plans are lowering overall costs. "High-deductible plans do not decrease health care costs long term. They have a limited impact initially, but are primarily a cost-shift to employees with little long-term impact on health care costs.''

SurModics says high-deductible plans are "changing who makes payment, not overall cost reduction.''

TCF Financial: "Revisit health care.'' The company added: "Leave us alone."

John Oslund • 612-673-7206 • Patrick Kennedy • 612-673-7926 •