Michigan business owners remain optimistic
Optimism about the economy remained high going into the third quarter among Michigan businesses surveyed by PNC Bank.
In a semi-annual sentiment survey, 45 percent of the responding small and mid-market business owners and executives in Michigan said they feel optimistic about their local economy. That compares to 34 percent who said they were optimistic in the spring and 28 percent a year ago.
Fifty-six percent of respondents told PNC Bank they were optimistic about their own business, versus 42 percent six months earlier and 43 percent in the fall of 2017.
“Overall, Michigan’s economy may lose a little steam, but the outlook for the remainder of the year is stable,” PNC economic Kurt Rankin wrote in an outlook accompanying the fall survey results.
Business owners and executives offered similar responses when asked about the national economy.
In looking ahead, 62 percent of respondents expect higher sales over the next six months and 7 percent expect a decrease. Nearly half see higher profits ahead and 10 percent expect lower earnings.
Nearly six in 10 business owners and executives surveyed expect higher supplier prices in the next six months, up from 43 percent in the two previous PNC Bank surveys.
Nearly one-quarter expect to hire more workers between now and next spring amid a tight labor market, and 71 percent expect no change in their workforce, citing reasons that include “a lack of business growth, difficulty in finding the workers with the right skills and doing more work using automation or outsourcing,” according to PNC Bank.
Four in 10 businesses expect to increase compensation.
In West Michigan, economist Brian Long’s monthly index of industrial purchasing managers found continued optimism about the economy in the short and long term. While the index for short-term business confidence over the next three to six months “ticked” lower from August to September, the long-term index for the next three to five years remained unchanged and well into positive territory.
“Although these readings do indicate a little concern about where the West Michigan economy is headed, the overall mood is still positive,” Long, director of supply chain management research at Grand Valley State University’s Seidman College of Business, wrote in his monthly report.
Other key indexes in the monthly survey — new orders, purchases and production — each improved for September. However, last month’s survey did detect emerging concerns about “bubbles” in the economy and worries about the effects of trade tariffs, “but none of them appear to be great enough to upset the current economic momentum” nationwide, Long wrote.
“The statistics for West Michigan and the rest of the country are still strong enough to carry us well into 2019 — and hopefully beyond,” according to the report.