What Business Thinks™ 2007—A Healthy 2007?

The annual Twin Cities Business What Business Thinks poll is a unique barometer of the Minnesota business community and the issues that weigh most heavily on their thoughts. In this edition of the poll, conducted in September 2006, 44 percent of the 482 respondents were CEOs; most others were senior executives, professionals, or sole proprietors. Their responses suggest a good prognosis overall for the business community this year. But that doesn’t mean there aren’t a few troubling symptoms to examine.

The Outlook

Responses regarding the state’s economic climate were remarkably similar to those given in the 2005 survey. This suggests a certain stability—no booms perhaps, but busts aren’t expected either. That said, there appears to be a little less optimism among Minnesota businesspeople—if not about their own companies, at least about the state of the state.

In both 2006 and 2005, respondents were asked: “In the last 12 months, have your company’s profits been higher, lower, or about the same compared to last year?” Last fall, 45 percent of respondents answered “higher,” while 33 percent answered “about the same.” Those percentages were identical in 2005. Business leaders also were asked: “In the next 12 months, do you expect your company’s profits to be higher, lower, or about the same?” In September, 53 percent of respondents indicated that they were projecting profit increases, and 34 percent expected profits to hold steady, compared to 52 percent and 34 percent, respectively, in 2005.

What's the biggest issue business wants state government to address? No surprise: health care costs.

Both years, those polled were also asked: “Generally speaking, would you say Minnesota is going in the right direction, or going in the wrong direction?” In 2005, 69 percent said the state was on the right path, while 31 percent—the highest pessimistic figure in a decade—said the state was headed south. In 2006, the “wrong-direction” percentage was even higher, 33 percent, while the percentage of “right-direction” voters declined slightly, to 67 percent.

Regarding the state’s economy, Minnesota business leaders also revealed a slightly more cautious outlook than the one they presented in 2005:

• Asked, “Over the past year, do you think Minnesota’s economy has gotten better, stayed the same, or gotten worse?”, 33 percent of 2006 respondents said they think the economy has improved, down from 43 percent a year earlier. Yet the ranks of those who think the economy has worsened increased by only two percentage points—up to 19 percent.

• Asked, “In the next 12 months, do you think Minnesota’s economy will get better, stay the same, or get worse?”, 29 percent of 2006 participants said they expect the state economy to gain ground, down from 36 percent in 2005. That said, 51 percent of 2006 respondents expected the economy to stay the same, while only 13 percent expect it to worsen. That’s a notable drop from the 21 percent who expected the economy to lose ground in the 2005 survey.