Concerns about labor shortages and inflation are weighing on the minds of Michigan’s business leaders, according to a quarterly economic survey released today by Business Leaders for Michigan.
According to the survey results, 70 percent of executives say U.S. and Michigan economies will stay the same or improve over the next six to 12 months. Most say their businesses are doing better than before the pandemic.
Labor shortages are being felt across all job categories, including in manufacturing, office, and front-line positions, with 85 percent of survey respondents expecting to have trouble filling positions over the next six-to-12 months.
Almost half (49 percent) of survey respondents expect inflation to continue at its current rate and 34 percent expect it to increase over the next six-to-12 months, while 16 percent say inflation is likely to come down. The biggest impacts of inflation are in materials and wages.
Other significant findings include:
- 94 percent of executives expect their company’s employment and capital investment in Michigan to stay the same or grow over the next six-to-12 months.
- 75 percent expect their company’s real estate footprint to remain the same, while 4 percent expect it to increase, and 21 percent expect it to decline over the next six-to-12 months.
“We must take significant steps to address the labor shortage across our state,” says Jeff Donofrio, president and CEO of Business Leaders for Michigan. “Our recent benchmarking study shows Michigan’s labor force participation rate is ranked 41st in the nation, and companies are feeling the effects. The historic state budget surplus gives Michigan a unique chance to increase the number of people with degrees and credentials and remove barriers to work, helping solve these talent gaps.”
While Michigan is ranked 41st in labor force participation in the Business Leaders’ benchmark study, the state ranked 29th overall when all metrics are tabulated.
Criteria for the benchmark study includes labor force participation, educational attainment, net talent migration, net business creation, business climate perception, poverty rate, CDP per capita, and median household income.
Michigan did best in the business climate perception category ranking 19th and in net talent migration with a No. 19 ranking.
Top 10 states for business are identified as Utah, Washington, Colorado, Texas, Massachusetts, Virginia, California, Oregon, Florida, and Arizona.
According to the study, in order for Michigan to become a Top 10 state, it would have to:
- Add 350,000 more workers to the workforce.
- Add 320,000 more people with college degrees.
- Have 60,000 more people moving into the state each year.
- Add $11,631 to annual income per household.
- Create 4,282 more companies each year.
Business Leaders for Michigan conducted its internal member survey Feb. 1-15.