LANSING, MI – According to the latest Michigan Future Business Index (MFBI) survey, conducted among 644 small to medium-sized businesses statewide (with 514 completing the survey), concerns over inflation and tariffs are on the rise, while optimism about the economy and business growth is fading. The once-upward trajectory in key performance indicators such as sales, profits, hiring, wages, and investment has reversed, hitting record lows in several categories.
The semi-annual MFBI was commissioned by Cinnaire and the Michigan Business Network and conducted by the Michigan-based research firm ROI Insight. Data was collected between May 19 and June 30, 2025. Findings were presented by Mike Witt, Cinnaire Senior Vice President of Asset Management, and Chris Holman, CEO of the Michigan Business Network.
“After several cycles of cautious optimism, we’re seeing a clear pullback in business confidence,” said Witt (left). “Profit growth, sales activity, and capital investments are all at their lowest levels since the survey began. Although businesses continue to show resilience, the growing concerns about inflation and tariffs are beginning to take a significant toll on expectations for the near future.”
According to Chris Holman (left), who launched the MFBI in 2003, “Several things jump out at me from this latest MFBI. This is the lowest I have ever seen the enthusiasm level for the next six months among Michigan’s business owners and managers. A prediction of lower revenues and shrinking profits points to a challenging future. What’s especially concerning is the sharp 10-point increase in dissatisfaction with how the most recent elections have impacted business. This is not typically a group that places blame on government—but that shift signals growing frustration and uncertainty, and business hates uncertainty. Ironically, even in the face of these mounting challenges, businesses still report a critical need for talent. That consistent demand shows their determination to grow, despite the headwinds.”
Key Findings Include:
· Record Low Profit Growth: Only 16% of respondents reported profit increases—the lowest in MFBI history.
· Sales Slowdown: Just 26% experienced sales growth in the last six months, also a record low.
· Wage Increases Continue to Decline: Only 46% reported wage increases, a 10-point drop from one year ago.
· Hiring Stagnates: Just 17% hired new employees—the lowest level in over a decade.
· Capital Investments Drop Sharply: Only 17% of businesses increased investments, another all-time low.
· Talent Acquisition Still Top Challenge: Finding and retaining qualified workers remains the most significant hurdle.
· Tariff Concerns Grow: Businesses report increasing anxiety over the impact of tariffs on operations and costs.
· Hiring Outlook Holds Steady: 31% plan to hire in the next six months, unchanged from last year; 56% expect to maintain current staffing; 8% anticipate layoffs.
· Sector Trends: Hiring is most likely in the Finance/Insurance/Real Estate sectors (38%) and least likely in Retail/Food Service and Business/Professional Services (29%).
Despite these challenges, the survey finds that customer demand and emerging opportunities are still fueling hope among many business owners. However, the sharp downward turn in nearly every economic indicator signals a need for renewed focus on policies that support small business resilience and growth.
To view full survey results MFBI Q2 2025 PresentationFull (1) or past editions of the MFBI, visit michiganbusinessnetwork.com/mfbi-survey.
