October 23, 2023
Latest Michigan Future Business Index Reveals Only 11 Percent of Small Biz Leaders Satisfied with Economy — 65 Percent Expect Full Recovery Within One Year
The latest Michigan Future Business Index (MFBI) data show only 11 percent of statewide business leaders representing small- to mid-sized businesses are satisfied with the current overall economy in Michigan, a new record low for the MFBI. Before COVID-19, more than 82 percent of last December’s MFBI respondents indicated satisfaction with the economy in Michigan.
However, many small business owners remain hopeful. While 44 percent say they are pessimistic about getting back to normal, nearly the same percentage (39%) are optimistic. Sixty five percent say they expect their business to fully recover within one year. Those who are optimistic pin their hopes on expectations of pent up demand, potential opportunities for growth, as well as their trust in customers loyalty when doors open. Those who are pessimistic cite the loss of customers as their top concern followed by the uncertainty of when they will open and what is to come when they do. Forty-seven percent of respondents say customer retention has decreased since the start of the pandemic.
However, businesses’ motivation to reopen doesn’t reduce their prudence to act with caution. A plurality (34 percent) believe they can reopen at the end of the stay home order with protections and practices in place to keep employees safe. Nearly the same percentage (30 percent) believe the State of Michigan should reopen slowly and thoughtfully, allowing only those regions with low spread rates to open first. A plurality (48 percent) also say they will open gradually, while monitoring and analyzing data and experiences in their own communities.
Additional findings include:
- More than 80 percent of small businesses have experienced significant decreases in sales, profits and cash flow.
- A majority (52 percent) have not laid off any employees.
- Nearly two-thirds (63 percent) have not cut wages.
- Nearly 80 percent have applied for financial assistance to get through the pandemic.
- Sixty five percent say they are enthusiastic to continue to do business.
- More than half feel doing business in Michigan will never be the same.
- Fifty-nine percent believe their business will emerge somewhat weaker.
- A plurality is unhappy with the application and approval process for federal assistance and 63 percent fear their voices are not being heard by lawmakers.
“The survey is showing that nearly the same percentage of businesses that were doing well to excellent before COVID-19 are now quite dissatisfied with the economy today,” said Chris Holman, CEO of the Michigan Business Network. “Although this reflects a complete turnaround from recent surveys, only 44 percent are pessimistic about business returning to where it was. Given what our statewide economy has been through over the past few months, I think this shows the indomitable spirit of small business owners in our great state.”
“We have been pleased to sponsor the MFBI since 2006,” said Al Gileczek, president of Accident Fund Insurance Company of America and CompWest Insurance. “The Spring 2020 survey may be one of the most critical MFBI reports as it details how small businesses are reacting to the multitude of challenges they are facing as a result of COVID-19. We believe this information will be useful to all businesses as they prepare to successfully operate during the remainder of 2020 and beyond.”
Review a detailed summary of the Spring 2020 Michigan Future Business Index at: MichiganBusinessNetwork.com.
About the Survey
The semi-annual Michigan Future Business Index has been commissioned by Accident Fund Insurance Company of America and the Michigan Business Network since 2006 and is conducted by the Michigan-based market research firm, ROI Insight. A total of 1,285 Michigan business executives from companies with 500 or fewer employees were interviewed from April 24 to May 11, 2020 via the web for the Spring 2020 survey.
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