Economic forecasts are tough to pull off under ideal conditions, so you can imagine the chaos of trying to plot where Michigan will stand on the economic scale six to twelve months down the road with a pandemic still in mid-stride.
Nevertheless, the Business Leaders for Michigan are out with a 2nd Quarter economic forecast after surveying top executives from one end of the state to the other, and it pretty well shows that we can expect to see the state continue to suffer the ramifications of the coronavirus, and some measure of mitigation will be needed in order to protect against future job losses.
In the grand scheme of things, fewer than one in five Michigan business executives holds the expectation of expanding capital investments or adding critical workers in the next six to 12 months.
The new survey of the organizations board members shows that leaders of Michigan’s largest employers anticipate the state and federal economies will worsen in the coming months as a result of the COVID-19 pandemic.
President & CEO Doug Rothwell says, “It shouldn’t be a surprise there has been some pullback in hiring and investment based on the conditions the pandemic has created, but it’s important to highlight that nearly 70-percent of Michigan’s largest companies still expect to be hiring at the same rate or even more over the next six to 12 months.”
The latest survey data shows 17.7-percent of Michigan employers anticipating job growth in their companies, and 15.5-percent expecting additional capital investment.
In the survey results, 40-percent of the execs who responded say they expect lower capital investments will be made by their companies, while 44.4-percent expect “about the same” level of investment.
Only 15.5-percent of the respondents expect the Michigan economy to improve over the next 6 to 12 months, with a third expecting performance on par, or “about the same” level. Over half, 51.1-percent fully expect the state’s economic conditions to worsen in that same time frame.
Rothwell suggests, “There is no question that we’re going through a period of great uncertainty right now,” and adds, “The best way to return our economy to full health is to mitigate the spread of the virus by wearing masks, washing hands and keeping distance from others as much as possible.”
Due to the economic uncertainty brought on by the coronavirus pandemic, expectations for the Michigan and U.S. economies have worsened from the fourth quarter of 2019, when only four percent of business leaders expected worsening U.S. economic conditions and just 20-percent expected a downturn in Michigan. Those numbers have skyrocketed, as business leaders are wary of growth in the coming months.
Quarterly Economic Outlook Reports are available from Business Leaders for Michigan at:
Business Leaders for Michigan, the state’s business roundtable, is dedicated to making Michigan a Top Ten state for jobs, personal income and a healthy economy. The organization is composed exclusively of the executive leaders of Michigan’s largest companies and universities. Members drive nearly 40-percent of the state’s economy, generate over $1 trillion in annual revenue and educate nearly half of all Michigan public university students.