Trade concerns business leaders
A quarter expect economic conditions to worsen, compared to 7.5% that expect improvement.
While most business leaders in Michigan are slightly more optimistic than late last year, nearly all believe the economy will stay the same or worsen in the next six to 12 months.
Nearly 68% of business leaders expect the economy to stay the same, according to the latest surveys by Business Leaders for Michigan, a business roundtable that includes top leadership responsible for driving nearly one-third of the state’s economy.
A quarter of respondents expect conditions to worsen, a decrease of 7% since the start of 2018.
BLM president and CEO Doug Rothwell associates the state’s higher exposure to international trade changes as the main reason for the pessimism over the remainder of the year.
Only 7.5% of survey respondents expect the state economy to improve in the next six to 12 months. Though an increase of nearly 3% since December, it’s still a decrease of nearly 70 percent from the start of 2018.
Respondents’ thoughts toward the U.S. economy were more neutral, with 80% foreseeing no change.
Comparatively, business leaders seem more optimistic regarding employment and investment for their companies.
“Michigan’s business leaders remain bullish on their ability to grow jobs and investment, and are anticipating plenty of opportunities on the horizon,” Rothwell said. “Any uncertainty expressed by the state’s senior executives are grounded in the unknowns surrounding international trade relations.”
Over the next six months to a year, 52.5% of respondents expect the same amount of investment, while 37.5% expect increased investment and 10% expect a decrease.
In the same time frame, 65% of respondents expect the same levels of employment, while 25% expect increased employment and 10% expect a decrease.
Though economists predict another recession as soon as late next year, many leaders have said the state is in a much better position than when the last one hit a decade ago, which eases some leaders’ worries.
Many of the state’s economists and economic developers tout Michigan’s diversified economy that relies on many industries, rather than just automotive. Manufacturing, agriculture, tech and other areas all have grown since then.
While the economy still is stable and growing, Rothwell said now is the time to invest in priorities to improve the state.
“Namely, directing at least $2 billion annually to fixing our severely ailing roads,” Rothwell said.
BLM was among organizations that recently voiced support for Gov. Gretchen Whitmer’s goal of increasing post-high school degree or high-value certificate to 60% by 2030 through the MI Opportunity Scholarship and Reconnect programs, meant to increase the percentage of Michigan’s workforce.
“We want to have homegrown talent sustaining our state’s productivity and continued economic growth, and to achieve that we need to boost the number of residents who attain a post-secondary degree or certification,” Rothwell said.