Survey: Majority of Michigan Business Leaders Expect Economic Decline

From Q2 2022 Business Leaders for Michigan survey, 53 percent of respondents expect economic decline in the next year.
Stock Market Graph next to a 1 dollar bill
While more optimistic about their own businesses, the majority of Michigan’s business leaders are expecting an economic downturn soon. // Stock Photo

Michigan’s top business leaders expect an economic decline — 53 percent — in the next year, according to a quarterly economic survey released today by Business Leaders for Michigan.

About 60 percent of those surveyed expect their businesses to keep their capital investment the same in Michigan, while 26 percent project they will boost capital investment.

On the labor front, 70 percent of executives expect to keep their employment levels the same, while 20 percent project an increase. And while the future of work may look different with many companies continuing a hybrid in-office/work-from-home model, 74 percent expect to keep their current real estate footprint.

Eighty-four percent of Michigan’s business leaders surveyed expressed concerns over filling jobs due to labor shortages. While all jobs are in demand, most companies need office and skilled trade workers, and 67 percent of business leaders cite applicants not having the necessary skills as a primary challenge.

“Michigan’s businesses are working every day to maintain and grow jobs in our state, even with inflation and workforce shortages. Making sure they can continue to do so in the future will take smart policies and investments by our state,” says Jeff Donofrio, president and CEO of Business Leaders for Michigan. “With a softening economic outlook, more than ever, Michigan will need to find ways to upskill its workforce and become more competitive for business and job creation.”

Michigan business leaders also shared their current workplace policy in the recent survey, with most companies having in-office work requirements. Over half of the respondents’ companies have a structured hybrid office environment and about a third are using an employee-choice hybrid model.

Third quarter survey results by the numbers:

  • 70 percent of executives expect to keep their business’ employment in Michigan the same, 20 percent expect to increase it and 10% expect to decrease it
  • 60 percent expect to keep their capital investment in Michigan about the same, 26 percent expect to increase it, and 14 percent expect to decrease it
  • 74 percent expect to keep their real estate footprint about the same, 16 percent expect to increase it, and 10 percent expect to decrease it
  • 84 percent of Michigan business leaders struggle to fill jobs, and 67 percent say candidates lack the necessary skills
  • 87 percent of member companies are in a hybrid setting, with 55 percent having designated days for employees to be in office
  • 46 percent expect the state’s economy to stay the same or improve in the next six- to 12-months, 53 percent expect it to go down
  • 36 percent expect the U.S. economy to stay the same or improve, while 64 percent expect it to go down
  • 52 percent of survey respondents expect inflation to come down in the next year, about 28 percent expect inflation to continue at the current rate, and 20 percent expect it to increase

Business Leaders for Michigan recently released “Compete to Win: Michigan’s Path to Top 10,” a plan that lays out a strategy for Michigan to become a leading state for economic growth.

Business Leaders for Michigan’s benchmarking study released in January informed “Compete to Win,” which placed Michigan at 29th in the nation for economic competitiveness. “Compete to Win” outlines key recommendations to become a Top 10 state through better educational outcomes, investing in people, accelerating the economy, and getting the fundamentals right.

Business Leaders for Michigan conducted the internal member survey July 25-Aug. 12, 2022.