Minnesota employers feel better about the economy, but they're still not ready to break out the champagne and celebrate the recovery.
Eight in 10 employers say the economy is stable or improving, up significantly from last year, according to the annual Business Barometer Survey conducted by the Minnesota Chamber of Commerce and Himle Rapp, a Minneapolis public affairs firm.
And even though more than half believe that Minnesota's business climate is better than competing states, the employers remain wary about where state and federal tax rates are headed, the cost of health care insurance and shortages of skilled workers.
Todd Rapp, who presented the ninth annual survey of 350 employers at Tuesday's annual meeting of the Minnesota Chamber, said increased optimism and a commitment to stepped-up investment and hiring is tempered by lingering concerns, including the resilience of the 36-month economic recovery.
"We've got a business community in Minnesota waiting for the gun to go off," Rapp said. "The election is a piece of it. And they want some certainty on who will be president and a debt-reduction plan and where tax rates are headed. "But, for the most part, they love Minnesota ... and optimism is slowly returning."
Asked if they were optimistic about the state's economic future over the next 10 years, 84 percent of respondents said yes -- including 30 percent who said they were "very optimistic."
Separately Tuesday, the Conference Board reported that its monthly consumer confidence index jumped a strong nine points to 70.3 for September, up from 61.3 in August. The indicator is watched closely because consumer spending drives most economic activity. The reading is still below 90, a level that indicates a strong economy.
Dave Murphy, president of Red Wing Shoes, said he remains a "little to the negative side of 'cautiously optimistic,'" even though his company expects a single-digit revenue increase this year on top of a strong sales increase in 2011.
"It's been a long road back [from the 2008-09 recession]," said Murphy, also a Minnesota Chamber board member. "I'm still concerned that we might slip back a little. And there are concerns about the European economy and the U.S. elections. We'll see."
Murphy quipped that a cold, wet fourth quarter would be good for sales of Red Wing work boots.
The chamber survey found that 31 percent of Minnesota employers believe the economy is improving, compared with 13 percent a year ago.
However, only 21 percent of the respondents reported that profits were better than a year ago, while 25 percent reported lower profits than in 2011.
In addition, an equal number of employers reported reducing employment as reported a hiring increase.
"While business owners have a positive long-term outlook, the survey identifies real barriers to job creation," Minnesota Chamber President David Olson said. "To cash in on this long-term optimism, [Gov. Mark Dayton] and the Minnesota Legislature must take timely action to address these concerns -- if they want companies to stay and invest in Minnesota."
The chamber represents 2,400 Minnesota companies and is the state's largest business lobby.
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