Concerns about labor shortages and inflation are weighing on the minds of Michigan’s business leaders, according to the most recent quarterly economic survey by Business Leaders for Michigan.
The survey published March 3 revealed labor shortages are being felt across all job categories, including in manufacturing, office and front-line positions, with 85% of survey respondents expecting to have trouble filling positions over the next six to 12 months.
“We must take significant steps to address the labor shortage across our state,” said 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.”
About 49% of survey respondents expect inflation to continue at its current rate, and 34% expect it to increase over the next six to 12 months, while 16% said inflation likely will come down. The biggest impacts of inflation are in materials and wages, they said.
Despite the challenges, 70% of executives say their business is doing better than before the pandemic. In addition, 55% of executives say the Michigan economy will stay the same, 22% say it will improve, and 24% say it will get worse in the next six to 12 months.
Forty-three percent said the U.S. economy will stay the same, 28% say it will improve, and 28% expect it to get worse.
Other significant findings from the quarterly survey include:
- 94% 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% expect their company’s real estate footprint to remain the same, while 4% expect it to increase, and 21% expect it to decline over the next six to 12 months.
The business roundtable conducted the internal member survey from Feb. 1-15.
Business Leaders for Michigan is composed 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 serve nearly half of all Michigan public university students.