Survey Shows Michigan Small Biz Leaders Believe State Economy Headed in Right Direction
LANSING (WWJ) – The latest Michigan Future Business Index survey from Accident Fund insurance shows that owners of small and mid-sized businesses believe the Michigan economy has turned the corner and is moving in the right direction.
As was the case in the June 2013 survey, business owners said they have seen added growth in their businesses over the past six months and are planning to make investments in their work force through increased wages and training.
Accident Fund president Mike Britt said that “it is encouraging to see that Michigan businesses are beginning to see the light at the end of the tunnel. … A healthy business climate in Michigan is good for all of us.”
The business owners expressed concerns about the Affordable Care Act, which is now seen as the top challenge to doing business in Michigan and has forced business leaders to modify employee health care plans to comply with new regulations and limit operating costs. Respondents said this means that employees will take on more financial responsibility for their health care coverage.
Another challenge for business is the continued shortage of qualified talent. The number of businesses who say they are having difficulties finding job candidates with specific skill sets continues to climb. Many are providing additional training and educational opportunities to their current employees to fill short-term needs.
Overall, 2013 has been a very positive year in terms of how the Michigan business community views the state economy. Throughout 2013, a majority of respondents to the Future Business Index survey have said that they are satisfied with the direction of the state economy. That is the first time in the history of the survey that satisfaction outgained dissatisfaction over two consecutive surveys.
Satisfaction with the state economy gained one percentage point since the spring survey, now at 55 percent, while dissatisfaction dropped by a point to 43 percent.
The percentage of businesses with new hires reached a new historical high with this survey, with 26 percent saying they have hired more employees over the past six months, up 15 percentage points since October 2011.
New job opportunities are the most robust in West Michigan (33 percent) and Metro Detroit (32 percent).
Start-up businesses (33 percent) and those in the manufacturing sector (35 percent) are the most likely to be hiring.
Also a positive sign, 42 percent of business owners reported in the latest MFBI survey that sales have increased over the previous six months, a one-point increase from the June 2013 survey and a nine-point increase since June 2011.
The outlook for increased wages continues to improve, as 32 percent of respondents say they plan to increase wages for their employees over the next six months — up 4 percentage points from June 2013 and up 14 percentage points from October 2011. Wages are most likely to climb within the manufacturing and financial, insurance and real estate sectors.
Fifty-nine percent of respondents give Michigan a positive rating for being a good market for their goods or services, a seven-point increase over October 2012.
Forty-three percent said they are encouraged, with 15 percent very encouraged, for their business 10 years from now. That is a 7 percentage point increase since October 2012.
The Michigan Future Business Index, commissioned by Accident Fund and the Michigan Business Network, is conducted semi-annually by PhoenixInnovate. The survey has been conducted since 2006. A total of 933 Michigan business owners, operators, officers and managers were interviewed for the November 2013 survey.