Chris Holman welcomes Paul King, President ROI Insight, Grosse Pointe, MI, to the MBN studio, and back to the Michigan Business Beat.
Watch Paul and Chris discuss the newly released Michigan Future Business Index and both of their perspectives on its findings in the YouTube video shared below:
Remind the Michigan business community about ROI Insight, and the Michigan Future Business Index
What were the highlights?
What are the top concerns?
What are the takeaways?
Summary
Chris Holman hosts the Michigan Business Beat, interviewing Paul King from ROI Insight about the recent Michigan Future Business Index survey for the Spring Quarter of 2024. Paul King discusses the key findings of the survey, which measures small business performance and predictions for the next six months.
The survey revealed that businesses are continuing to improve post-pandemic, with a majority feeling fully recovered. Inflation has become the top challenge for businesses, surpassing talent issues. Despite this, sales, profits, and hiring have increased in the past six months. The survey also shows a positive outlook on Michigan's economy and business environment.
However, there's uncertainty due to the upcoming (at the time of this July recording) presidential election. The discussion touches on the impact of inflation on profits, wage inflation, and the importance of reunifying the country for business stability. Paul King emphasizes the value of the survey in understanding business trends and challenges in Michigan.
Paul King highlights that a majority of businesses now view the economy positively. He also notes that businesses see Michigan as a good market for their goods and view the tax structure for small businesses favorably.
00:00:05 Introduction and Overview of Michigan Future Business Index
Chris Holman introduces Paul King from ROI Insight and mentions the Michigan Future Business Index survey. Paul King explains that the survey measures small business performance over the last six months and predicts attitudes for the next six months.
00:01:22 Post-Pandemic Business Recovery
Paul King reports that the survey shows continued improvement for businesses after the pandemic. He notes that a majority of businesses feel they've fully recovered, and the number of businesses that don't think they'll ever recover is decreasing.
00:01:47 Top Business Challenges: Inflation and Talent
Paul King identifies inflation as the top challenge for businesses, with 15% of respondents citing it as their biggest issue. He mentions that talent issues have slipped to second or third place, though the difference is not significant.
00:02:14 Business Performance and Future Outlook
Paul King reports that in the past six months, businesses saw increases in sales, profits, and hiring. However, he notes a 'wait and see' attitude for the next six months due to political uncertainty, particularly with the upcoming presidential election.
00:03:03 Positive Perceptions of Michigan's Economy
Paul King highlights that a majority of businesses now view the economy positively. He also notes that businesses see Michigan as a good market for their goods and view the tax structure for small businesses favorably.
00:03:40 Economic Challenges and Opportunities
Chris Holman points out that businesses often view the economy as both a challenge and an opportunity. Paul King acknowledges differing viewpoints on the economy's state, with some businesses still seeing struggles while others believe it's improving.
00:04:39 Impact of Political Messaging on Business Sentiment
Chris Holman discusses how political messaging can affect business sentiment and emphasizes the need for unifying messages to build stability in the business world.
00:05:15 Inflation's Impact on Profits and Wages
Paul King notes that while businesses feel good about sales and revenue, they're less optimistic about profits due to inflation. Chris Holman adds that wage inflation is also eating into profits as businesses pay more to recruit and retain employees.
Cinnaire Joins Michigan Business Network to Present Results for Q2 2024 Michigan Future Business Index Survey
In a recent statewide survey of 691 small to medium size businesses, respondents to the latest Michigan Future Business Index (MFBI) survey indicated that while inflation is the biggest challenge for small businesses, finding customers and acquiring talent are close behind. While reports of increased profits and new hires over the past six months have ticked up slightly since Q4 2023, reports of sales and wage increases are unchanged since then.
The semi-annual MFBI was commissioned by the Michigan Business Network. The survey is sponsored by Cinnaire and conducted by the Michigan-based market research firm ROI Insight. Mike Witt, Cinnaire SVP, Asset Management, recently joined Chris Holman, Michigan Business Network CEO, to share the survey results in a forum.
“The Michigan Future Business Index yields valuable insights for community leaders, policymakers and advocates, shedding light on the challenges faced by business owners in today’s economy,” said Mike Witt. “Through this survey, small business owners have the opportunity to contribute their unique perspective on Michigan’s economy, enabling decision-makers to effectively address the obstacles hindering business operations in the state. Cinnaire is proud to sponsor the MFBI survey and support the vital role small businesses play in fostering thriving communities.”
The survey found a majority of respondents are satisfied with the business economy, continuing the trend back into positive territory. While more than half of businesses say they have fully recovered from the pandemic, projections for sales, profits, hiring, and wages in the next six months are all now trending slightly downward. Optimism stems from several key factors including customer demand, business growth, quality talent, and loyal customers.
Chris Holman, who started the survey in 2003 and took it statewide in 2006, shared this about the latest findings. “The inflation has raised its ugly head to the number one challenge for businesses in the state of Michigan. The acquisition and retention of talent is a very close second. No businesses feel revenue will be flat for the next six months. They are not enthused about the potential of profit. I would remind everyone that this is an election year and business is traditionally a little more pessimistic and a little more cautious.”
Additional findings:
- Satisfaction with the economy has now been in positive territory in three consecutive surveys.
- While the MFBI shows growth in sales and profits over the last six months, respondents are more bearish for the next six months.
- While profit projections slump, so do plans for new hires. Nearly two-thirds of businesses will invest in training and promotion from within.
- Inflation is still a significant byproduct of the COVID-19 pandemic, impacting profits, hiring, wages, and investments. However, other pandemic challenges, such as supply chain issues, have dwindled.
- Nearly two-thirds of respondents believe Michigan is a great place to do business.
For more details, data and graphs covering the results of the latest MFBI, please click here.
About the Michigan Business Network
As the leading voice for small businesses in Michigan, the Michigan Business Network (MBN) believes the people making the decisions need to hear how your business is doing. MBN is an information provider seeking to help grow and develop Michigan’s economic community.
https://www.michiganbusinessnetwork.com/
About Cinnaire
Cinnaire is a non-profit financial partner that supports affordable housing developments along with community and economic revitalization initiatives through creative investments, loans and real estate development services. Since 1993, Cinnaire has invested $4.7 billion to support the development of 811 housing communities in 10 states, providing 49,700 affordable apartment homes for more than 100,000 individuals and families and has provided community development loans to support the creation/retention of more than 187,000 square feet of commercial, mixed-use, and community space. In its mission to change lives and transform neighborhoods into thriving communities, Cinnaire has helped to create or retain over 76,000 jobs and spur $8.8 billion in economic impact. https://cinnaire.com
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