The region’s company owners and top executives have regained confidence in their organizations and the Milwaukee economy. Even while they are concerned about rising business costs, supply chain disruption, and staff attraction and retention, they remain optimistic.
When compared to their expectations a year ago, more business leaders expect their company’s sales and profitability to improve in 2022.
These are some of the key findings from the Milwaukee Commercial Journal’s 2022 Economic Outlook Report for CIBC, a leading North American financial company with 11 million personal banking, business, public sector, and institutional customers. In the United States, Canada, and around the world, the bank provides a comprehensive variety of advice, solutions, and services. Economic Outlook polls were conducted in the fourth quarters of both 2021 and 2020 to determine how business executives expect their firms, the metro region, the state, and the national economy to perform over the next 12 months. There were 151 Milwaukee respondents in the 2021 poll, with yearly revenue ranging from less than $500,000 to more than $100 million. Here are some more highlights from the survey.
Confidence in business and the economy
The percentage of respondents who are optimistic about their company’s future in 2022 has increased to 59 percent, up from 44 percent in 2021. The Milwaukee and Wisconsin economy now has a 24 percent confidence rating. The level of confidence in the US economy stayed unchanged at 21%.
“Over the last several months, our Wisconsin-based customers have made significant commitments to growth,” says Jeff Janza, managing director and Wisconsin group head, CIBC US. “These growth initiatives have come from a variety of industries, and include add-on acquisitions, plant capacity expansion projects, and capital equipment projects.”
About 66 percent of executives polled expect their company’s revenue to rise in 2022, up from 52 percent in 2021; 18 percent expect it to stay the same, and 16 percent expect it to fall, down from 27 percent a year ago.
When asked how their firm will change in 2022 compared to 2021, the top response was the price of goods and services – 69 percent against 34 percent. The volume of real commercial activity, real profitability, and financial investment in the business are all likely to vary dramatically.
Because of the epidemic, 55% of respondents said their organizations changed their business models and strategies, and these adjustments have had a beneficial influence on the business. For the year 2022, 47% think they’ll have a hybrid work environment for their staff. In addition, only 31% of respondents are concerned about their company’s capacity to stay afloat as a result of the epidemic, down from 53% a year ago. In 2022, 86% of respondents expect their businesses to be profitable, up from 79 percent in 2018.
Aside from talent, the rising cost of doing business (87 percent), the expense of health insurance and employee perks (78 percent), and the global economy are among Milwaukee respondents’ top concerns (77 percent ). The U.S. economy and another required business closure due to Covid-19 have both dropped dramatically in the level of concern for 2022.
The search for new talent
Finding and keeping good personnel is a worry for 84 percent of respondents in 2022, up from 55 percent a year earlier. Their main concerns are not having enough skill to build their businesses (78 percent) and not being able to attract talented, younger employees (62 percent , up from 44 percent a year ago).
When asked why they’re recruiting more people, 58 percent say it’s because their staff are overworked, up from 37 percent a year ago; 56 percent say it’s because production is up; and 39 percent say it’s because they’re expanding into new areas.
In 2022, business efforts will also be aimed at addressing talent shortages. This year, 53% of respondents plan to spend more on employee training and development, while 33% plan to spend more on employee health and financial benefits.
Finding excellent applicants is the main worry for 86 percent of respondents when assessing areas of difficulties for attracting talent to their companies; 69 percent cite the timing for filling a post, and 65 percent cite the availability of individuals for the interview process.
Concerns about the supply chain
In 2022, 54 percent of respondents anticipate supply chain disruptions, up from 33% a year ago. The percentage of those who expect their products or services to be harmed has risen to 45 percent, up from 40 percent last year.