June 22, 2009 (LANSING, MICH.)—While Michigan’s small to mid-size businesses continue to express high levels of dissatisfaction with the economy, a recent survey found a sharp increase in the percentage of business owners who say they expect their bottom line will improve over the next six months. These results and others in the survey suggest that businesses believe the worst of the current economic downturn may be behind us.

In the semi-annual Future Business Index, a study funded by Lansing-based Accident Fund Insurance Company of America, the number of owners of small- to mid-size business owners who say they expect their bottom line will improve over the next six months jumped 10 percentage points (11 percent in November 2008 to 21 percent in April 2009) to the highest level it has been since the survey was first administered in May 2006.

“We naturally anticipated a negative reaction from business owners asked about the economy,” said Keith Adkins, vice president of Marketing at Accident Fund. “But we were pleasantly surprised to find that business owners are more optimistic about their own company results than we may have thought.”

While 80 percent of business owners say they are dissatisfied with the condition of the economy as it affects their business, there were other bright spots in the results:

• There was a dramatic reversal in the outlook business owners have about their business. Forty-one percent say the outlook for their business over the next six months is either “Very” or “Somewhat” Good, compared to November 2008 when 52 percent indicated the six-month outlook for their business was either “Very” or “Somewhat” Bad.
• More than seven out of 10 business owners (71 percent) say they plan to maintain current levels of employees. This is the highest since the FBI survey has been fielded.
• There was a sharp decline in the percentage of businesses that expect they will or might have to lay off employees, along with a mild uptick in the number that plan to hire more staff.
• 11 percent said they will or may have to lay off employees versus 19 percent in November 2008.
• 14 percent said they plan to hire more employees versus 12 percent in November 2008.

Says Chris Holman, small business advocate for the state of Michigan, “There’s no doubt our state is facing extremely difficult economic challenges. But, as these results show, Michigan business owners are weathering the storm, staying focused, and feeling moderately positive about the outlook for their own business.”

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Accident Fund’s Future Business Index is produced twice annually. Working in conjunction with EPIC ▪ MRA, 600 to 700 small- to mid-sized businesses across Michigan are asked about their business outlook. The details are calculated and distributed throughout Michigan. The next survey will occur in November 2009. The survey margin of error is ±4.0 percent.

Headquartered in Lansing, Michigan, Accident Fund Insurance Company of America is one of the nation’s leading workers compensation insurers with more than $3 billion in assets. Founded in 1912, Accident Fund is rated “A” (Excellent) by A.M. Best and is a wholly-owned subsidiary of Blue Cross Blue Shield of Michigan. Accident Fund Insurance Company of America and its subsidiaries (Accident Fund National, Accident Fund General, United Wisconsin Insurance Company and CompWest) are licensed in 49 states plus the District of Columbia*.

*Licensing per state varies by subsidiary.

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