(As seen on WZZM TV 13) The 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, although bright spots remain, according to results of a Business Leaders for Michigan (BLM) survey conducted this month.
BLM released data from its quarterly survey of board members and the numbers reflect the uncertainty brought about by the economic impacts of the coronavirus.
“It shouldn’t be a surprise there has been some pullback in hiring and investment based on the conditions the pandemic has created,” said BLM President and CEO Doug Rothwell. “But it’s important to highlight that nearly 70% of Michigan’s largest companies still expect to be hiring at the same rate or even more over the next six to 12 months.
“Things could have been much worse. The fact that the majority of businesses are saying they’re still going to be either investing or not cutting investment, hiring or not cutting hiring during a time like this, is very positive. While this was not nearly as positive as our surveys have been for the past few years, I was expecting it to be even more negative because of what we’re going through and the fact that this virus doesn’t seem to be abating as fast as people had hoped and that we are getting a second wave.”
Rothwell said he attributes this to the health of Michigan businesses heading into the pandemic, many of which had already become leaner and more nimble as a result of the last recession and were therefore better equipped to weather another downturn.
The latest survey data shows 17.7% of Michigan employers are anticipating job growth in their companies, and 15.5% are expecting additional capital investment.
“There is no question that we’re going through a period of great uncertainty right now,” Rothwell said. “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 pandemic, expectations for the Michigan and U.S. economies have worsened from the fourth quarter of 2019 report, when only 4% of business leaders expected worsening U.S. economic conditions and just 20% expected a downturn in Michigan. Those numbers have skyrocketed, as business leaders are wary of growth in the coming months.
Rothwell said although government spending has alleviated some of the pandemic pain, more is needed.
“Until this virus is beaten back or a vaccine comes, we’re going to be challenged to move the economy forward. No amount of government spending can overcome that. It can bridge it, but it can’t really move things forward. That’s the biggest challenge that we have. We’re not going to see incomes going up and people employed to the degree we’d like until we get through this.”
Rothwell said BLM is pushing for a focused set of priorities in the next federal aid package.
“We are very much advocating that the next federal package needs to include adequate resources for state and local governments, because the deficits that they’re facing were no fault of their own; they were totally driven by the COVID crisis,” he said.
“We also think that what needs to happen is that states use that money for the highest uses — putting it into education, support for small businesses and the direct services that are needed for people’s health and safety. Those have got to come first. We can’t see it diverted for other purposes right now, and the same is true for the federal package. This is a time to make sure that we focus on what’s needed most — not earmarks and special programs that people want to see included at a time when we have such a severe crisis.”
Rothwell said the faster the next aid package comes, the better.
BLM’s quarterly economic reports are available at businessleadersformichigan.com/category/data/surveys.
Business Leaders for Michigan, the state’s business roundtable, is dedicated to making Michigan a top 10 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. Its members drive nearly 40% of the state’s economy, generate over $1 trillion in annual revenue and educate nearly half of all Michigan public university students.