Forty-four percent of respondents to a recent WMC survey are delaying or shrinking projects or capital expenditures due to high interest rates.
Wisconsin Manufacturers & Commerce yesterday released findings from its latest Wisconsin Employer Survey, which found respondents continue to have a largely negative view of the state economy. Just 23% said the Wisconsin economy is strong, similar to the response to a survey six months ago but well below the 39% who rated it as strong last summer.
Thirty-five percent of respondents said inflation was the top issue facing their company, followed by 25% pointing to the workforce shortage and 16% saying health care costs.
Since January 2021, more than half of responding businesses have seen costs increase by over 20%, while one-fifth have seen costs rise by more than 30%.
“Higher costs are putting pressure on everyone right now,” WMC President and CEO Kurt Bauer said in the report. “Unfortunately, that means businesses and families have to make tough decisions that have a negative impact on our economy.”
Over the past 18 months, the share of businesses that plan to add more workers has dropped from 60% in an earlier survey to 39% this summer. Report authors note that drop comes as fewer businesses are struggling to hire employees, moving the workforce shortage lower on the list of top concerns.
“There is no question that the mix of higher costs and higher interest rates are making employers rethink investment and hiring plans,” Bauer said. “While we may not enter into a typically defined recession, this data shows that the economy may stagnate at least through the end of the year.”
Fifty-three percent expect the state economy will remain flat over the second half of this year, while 36% predict moderate growth, 8% predict a decline and 3% expect to see good growth.
When asked about future plans for paying workers, 22% said they will increase wages less than 3% this year and 71% said they will boost wages by more than 3%. Another 6% said they will keep wages the same.
The survey was conducted over the first three weeks of July over email and traditional mail.
