Slow grow: Business leaders’ predictions reflect doubts
Quarterly survey finds fewer expect economy to improve in the next 18 months.
Some of Michigan’s top business leaders forecast slow economic growth over the next year and a half for the state and nation.
Data from the most recent quarterly survey by Business Leaders for Michigan revealed that the majority of the state’s senior executives believe the Michigan economy will stay about the same over the next six months, with similar projections for the U.S. economy. BLM surveys its membership each quarter to determine projections for the upcoming year.
Slow growth doesn’t necessarily mean the state will experience a dearth of new businesses or investments. More than half of the leaders surveyed anticipate that their companies will add jobs, and about a third of them plan capital investments in Michigan in the next six months.
“I think that they obviously feel that not only is the business climate in Michigan good from a tax and government standpoint, but that they see business opportunities here as well,” BLM President and CEO Doug Rothwell said.
The report details a forecast of a stagnant economy for Michigan in the next 18 months, with 64 percent of the business leaders surveyed forecasting that Michigan’s economy would remain flat. The percentage of business leaders expecting a change in the state economy in the next year and a half was split, with 18 percent predicting an improved economy and 18 percent expecting decline.
In the fourth quarter of 2015, 34 percent of business leaders surveyed predicted that Michigan’s economy would improve over the next 18 months.
Rothwell noted that the report’s numbers don’t necessarily reflect pessimism but a desire to avoid becoming complacent with the economy’s rebound in recent years.
“I think it’s a glass-half-empty, half-full situation,” he said. “Things are still relatively good, but I think these numbers show that we can’t be complacent. If we want to raise incomes, create more jobs, we need to get better.”
Rothwell said three areas are crucial to improving the economy in Michigan: a focus on economic development programs, infrastructure and talent development, and retention.
Business leaders were more optimistic about Michigan’s economic prospects over the next 18 months than they were about the nation as a whole. Only about 17 percent said they expected the U.S. economy would improve, while 40 percent predicted it would decline.
“I think part of it is, what’s happening nationally has more of an impact,” Rothwell said about Michigan’s more optimistic returns. “It’s an election season, you’re seeing gridlock in Congress, and that has a lot to do with people feeling more pessimistic about the nation as a whole than here in the state.
“Yes, in Michigan we have our problems, too, but they don’t feel quite as great as what you see and read about in Washington.”
Rothwell said it’s too early to tell what kind of impact the upcoming election will have on the economy, but he did anticipate it will affect how the economy is perceived, which could be reflected in the next quarterly projections.
“We need to make sure that we get leaders who understand and recognize that we still have to compete with other global economies,” he said. “I think the election does have a bearing on everyone’s outlook, but as of right now it’s certainly too early to tell how either candidate will impact the actual investment decisions that people make.”