Companies in Minnesota that work for other businesses — such as accounting, legal, and architectural firms — are more confident about their prospects than they were a year ago.
According to a survey of Minnesota professional services firms released Monday, 52 percent believe their revenue will grow over the next 12 months. That’s compared with 46 percent a year ago.
Among these types of companies, which watch overall economic conditions closely, 44 percent believe their profits will rise over the next 12 months, compared to 41 percent a year ago.
The survey, conducted by the Federal Reserve Bank of Minneapolis and the Minnesota Department of Employment and Economic Development, collected responses from 241 randomly selected business services firms in April and May.
“Minnesota’s service firms directly benefit from a growing economy and as a result are strong indicators of business conditions and trends,” said Katie Clark Sieben, commissioner of the department. “With 82 percent of surveyed business service firms expecting steady or increased growth in the near future, we know business confidence is on the rise.”
Asked for their outlook on the state economy, 49 percent of respondents said they believe employment and consumer spending will continue to rise, compared to 44 percent for employment and 41 percent for consumer spending a year ago. More firms expect higher corporate profits and more mergers and acquisitions.
Inflation expectations also are increasing. A year ago, 54 percent of respondents said they believe inflation will rise, compared to 61 percent in 2014.
Also, lending appears to have loosened up, according to the survey. A year ago, 15 percent of respondents said tight credit conditions were preventing them from hiring more workers. This year, only 5 percent cited credit conditions as an obstacle to hiring.
The survey asked questions about the North Dakota oil boom and its effect on Minnesota business services firms. About 17 percent of respondents said North Dakota’s boom has driven sales for their firms, but 96 percent said it has had no impact on their hiring.