Minnesota small businesses bullish about state economy, U.S. Bancorp survey says

Unison Comfort Technologies, a manufacturer of commercial air-handling equipment, is completing an expansion in north Minneapolis that will drive employment to nearly 350 this year, an increase of about 100 office-and-manufacturing positions since 2014.

The new manufacturing jobs average about $17 an hour plus benefits.

"I'm positive," said Jay Althof, the company's president, pointing to a 25-percent sales boost in 2014 that follows a 15 percent bump in 2013. "We picked up a lot of replacement-equipment business [since 2011] from people who delayed investing in existing buildings, and we're picking up some new building-equipment orders."

Unison Comfort has about $125 million in revenue and also operates smaller plants in Texas and California. It's invested more than $5 million to expand and buy equipment at its north Minneapolis office-and-plant complex along Interstate Highway 94 between W. Broadway and Lowry Avenues to accelerate production of high-efficiency heating, ventilation and air conditioning systems for commercial and industrial customers.

Unison received about $480,000 in state-and-city grants tied to hiring, an in-plant training center and environmental improvements.

Unison also seems a proxy for the annual U.S. Bancorp Small Business Survey, released Monday, that finds Minnesota business owners are more optimistic about the national economy than their peers elsewhere.

"We're seeing a number of positive signs among Twin Cities small-business owners, particularly those on the larger end of the segment," said Craig Veurink, regional business banking manager for U.S. Bank in the Twin Cities. "The recession caused many small businesses owners to squeeze an extra year or two out of a piece of equipment. Now many of our customers are finally deciding to upgrade and replace, especially over the past couple of quarters."

Nearly three-quarters of Minnesota small business owners believe the national economy is in a recovery or expansion, compared to 67 percent across the country. Beyond that, 49 percent say Minnesota's economy is stronger than the national. The most commonly cited reason for saying so is the state's relatively low unemployment rate and high wages.

Nationally, only 30 percent of small business owners described their state economy as stronger than the national.

Despite improving state and national economies, Minnesota small business owners and those across the country remain cautious about hiring. The survey found that only 20 percent of Minnesota small business owners plan to add staff over the next year compared to 25 percent nationally. And 29 percent plan to make a capital expenditure, compared to 34 percent nationally.

It's also possible some Minnesota businesses invested earlier in the recovery as the state's recovery accelerated. Minnesota's unemployment rate is 3.7 percent compared to a U.S. rate of 5.5 percent.

"We've doubled in size since the recession," said Jim Bebo, founder and owner of 22-year-old ACI Asphalt and Concrete in Maple Grove and also a U.S. Bank customer. "There's a lot of work out there."

"I'm hoping for 10 percent revenue growth this year," said Bebo, adding that ACI is less than $20 million in revenue. "I'm not 100 percent confident in government's ability to manage budgets and the economy, but I have confidence in the Minnesota economy. Our economy seems more solid than some other states."