Minnesota’s business services firms face challenges related to labor availability and inflation

SAINT PAUL, Minn. (KELO.com) — Minnesota business services firms expect largely flat conditions in the coming year.

That’s according to a survey of Minnesota business services firms conducted by the Minnesota Department of Employment and Economic Development and the Federal Reserve Bank in Minneapolis.

Higher costs of goods, including food and energy, largely driven by the COVID-19 pandemic and the Russian invasion of Ukraine, have led most respondents to expect higher inflation going forward.

Read MDEED’s press release below for more details.

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Business service providers in Minnesota expect largely flat conditions in the coming year, according to a survey by the Minnesota Department of Employment and Economic Development (DEED) and the Federal Reserve Bank in Minneapolis.

Higher costs of goods, including food and energy, largely driven by the COVID-19 pandemic and the Russian invasion of Ukraine, have led most respondents to expect higher inflation going forward.

85% of respondents expect inflation to rise, while 61% expect employment levels to stay the same and 43% expect consumer spending and corporate profits to fall. Labor availability was a particular concern among respondents: 62% expected the level to remain the same and 33% expected it to decrease.

“The survey shows what I think many of us have recognized – that inflation and labor availability are major concerns going forward,” he said DEED Commissioner Steve Grove. “To help businesses find workers and connect Minnesotans with higher-paying jobs this summer, we are traveling across the state as part of our Summer of Jobs campaign to connect workers with jobs currently available in our state .”

As part of this broader sprint to help jobseekers and employers connect, Commissioner Grove will travel to Owatonna this week to highlight opportunities to connect with untapped labor pools.

Last year, Minnesota businesses reported unchanged conditions, with 64% reporting unchanged employment. It was also reported that productivity remained largely unchanged, with nearly 60% showing no change. For labor availability, 60% reported unchanged conditions, while 37% reported a decrease and only 4% an increase in labor availability.

A new question about teleworking. Twenty-two percent of respondents said they are not considering or implementing teleworking, nearly the same percentage as some employees.

DEED and the Federal Reserve Bank of Minneapolis have conducted this survey annually since 2006. You can see a detailed report from the 2022 Survey of Minnesota Business Services Firms on the DEED website.