Fed study shows businesses in the county have a more optimistic economic view compared to other areas of Wisconsin and the region
Submitted by the St. Croix Economic Development Corporation
As companies continue to face economic uncertainty, St. Croix County businesses are more economically optimistic and more likely to be hiring than other businesses across Wisconsin and the broader region, according to new data collected through a partnership between the St. Croix Economic Development Corporation and the Federal Reserve Bank of Minneapolis.
“It’s good to see that St. Croix County businesses continue to believe in the strength and potential of our local economy,” said Melissa Meschke, executive director of St. Croix EDC. “The data helps us understand that while businesses in our region are hiring and investing in their employees, rising costs are putting real pressure on their operations and profitability. Being able to work and partner with the Minneapolis Fed helps us do even more to support the economy across the county.”
The Minneapolis Fed’s July General Business Survey gathered responses from 905 business owners and financial decision-makers across the Federal Reserve’s Ninth District, which includes St. Croix County. Working with the Minneapolis Fed, St. Croix EDC helped generate responses from 53 county businesses, providing an unusually detailed look at local economic conditions.
The survey showed that slightly more than half, about 51% of St. Croix County respondents, said they were somewhat or very optimistic about the next six months. That compares with 43% of respondents across Wisconsin and 34% across the Ninth District, which includes Minnesota, Montana, North Dakota, South Dakota, northwestern Wisconsin and Michigan’s Upper Peninsula.
Only 17% of St. Croix County respondents expressed pessimism, compared with 26% statewide and 36% across the district.
The optimism is directly shown in views on local hiring activity. More than 62% of St. Croix County businesses said they were actively trying to hire, compared with 58% across Wisconsin and 44% throughout the Ninth District.
More than 41% of county respondents expect staffing levels to increase during the next six months—nearly twice the share reported across the full district. Among local businesses that are hiring, 79% are seeking permanent full-time employees.
Finding those workers remains difficult. Nearly 73% of St. Croix County employers that are hiring described the process as moderately or extremely difficult. Labor availability was identified by 34% of county respondents as one of their two greatest operating challenges.
The most widely shared concern, however, was the rising cost of materials and other nonlabor inputs. Sixty percent of St. Croix County respondents identified those price increases as a top challenge, compared with 49% across Wisconsin and 46% districtwide.
Those costs are squeezing company earnings. While the percentage of county businesses reporting higher revenue was similar to that reporting lower revenue, 46% said profits had declined from the previous year. Only 30% reported higher profits.
The survey also shows that business margins are under pressure. More than 78% of responding St. Croix County businesses said wholesale prices from vendors increased by at least 5% during the past year. Only 54% said they increased the prices charged to customers by that much, which creates the margin pressures.
Meanwhile, nearly 89% of county businesses reported raising wages during the past year, another indication of the competition for workers and the increasing cost of doing business.
This local information is available because St. Croix EDC has partnered with the Minneapolis Fed to encourage county businesses to participate in regional surveys. This is helping give local employers a more informed voice while providing community leaders with timely information about the county economy.
St. Croix EDC will help continue this conversation at a special event on February 17 featuring Ron Wirtz, regional outreach director for the Federal Reserve Bank of Minneapolis. Wirtz will discuss economic conditions in St. Croix County and the surrounding region and answer questions from area business and community leaders. Click here to register for the event or visit stcroixedc.com for more information.
The full regional survey findings are available at minneapolisfed.org.