Business Leaders for Michigan’s second quarter survey of 75 of Michigan’s most prominent executives forecasts a loss of momentum in the nation’s economic recovery, but continue to predict that Michigan’s economy should bottom-out during early 2011. The loss of momentum is due to a myriad of factors creating uncertainty in the markets, such as unfunded government liabilities, new regulations and the end of government stimulus programs. The executives continue to forecast that Michigan will lag the nation’s economic performance over the next eighteen months and, as a result, predict modest new hiring and capital investment in Michigan. The executives represent a cross-section of industries across Michigan and are in a unique position to assess the direction of the economy.
Highlights of the survey include:
- Approximately 33 percent forecast increased hiring in Michigan in the next 6 months. Over seventy percent forecast flat or lower capital investment in Michigan during the same period. The hiring forecast is higher than the last quarter, while the capital investment forecast is the same.
- 82 percent believe Michigan’s economy will be the same or deteriorate over the next 6 months, about the same as the 1st quarter survey. This is in contrast to over 90% thinking the US economy will be the same or get better.
- 41 percent think Michigan’s economy will get better 18 months from now, a decline of about 20 percent from the 1st quarter survey results. This contrasts to 64% who believe the US economy will be better 18 months from now.
- Most Michigan companies expect to perform better than their sector competitors.