Michigan Businesses Believe Worst of Economic Recession Is Over

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 funded by Lansing-based workers’ compensation insurer Accident Fund Insurance suggest that businesses believe the worst of the current economic downturn may be over.

In the semi-annual Future Business Index, 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. “While the percentage of business owners who are optimistic is still low, it’s significant that there was such a significant jump in the number who expect stronger bottom lines in the next six months.”

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.
• The number of businesses who say the outlook for their businessover the next six months is either “very” or “somewhat” good increased 13 percentage points (41 percent in April 2009 versus 28 percent in November 2008).
• The number of businesses who say the outlook for their business over the next six months is either “very” or “somewhat” bad dropped 12 percentage points (40 percent in April 2009 versus 52 percent in November 2008).
• 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.

Source: Accident Fund Insurance Company of America
www.accidentfund.com.