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Sunday, 22 July 2012 01:14

Reports: Small businesses look on the bright side

Written by  Jayson Bussa
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WEST MICHIGAN — Small business owners across Michigan feel increasingly optimistic about their future prospects, according to results from a pair of surveys that found expectations for increased hiring and improved sales and profits.

In the Small Business Association of Michigan's June survey, 22 percent of 600 respondents said they increased hiring in the past six months, a rate double the amount found in the prior survey last November. Twenty-six percent said they intend to hire more staff over the next six months.

The semi-annual SBAM survey also found:

• 38 percent of respondents grew sales over the prior six months and 44 percent expect to do so again in the coming six months.

• 29 percent reported increased profits and 39 percent expect profits to grow in the second half of 2012.

• 27 percent increased wages for employees during the first six months of 2012 and 27 percent planned to do the same between now and the end of the year.

The survey results reflect improvements in Michigan's economy and that "entrepreneurs responded by picking up the pace in filling jobs," Mike Rogers, vice president of communications at SBAM, said in a statement.

Many SBAM members also indicated that savings from restructuring the state's business tax in 2011 is going to help them grow their business, Rogers said.

Another recent survey of small business owners — by Lansing-based Accident Fund Insurance Co. of America — found similar results.

Conducted in May by Marketing Resource Group Inc., the survey results showed the 864 respondents expect further growth in the coming months in sales, profits, hiring and wages.

"These surveys continue to show increasing evidence that the business climate in Michigan is improving," Accident Fund President Mike Britt said.

Forty-three percent of business owners answering the Accident Fund survey said they are satisfied with Michigan's economy, a 32-point increase from October 2011. Twenty-seven percent said they increased employee wages, versus 15 percent in the previous survey, and 22 percent of businesses indicated they increased the number of employees in the past six months, double the prior rate.

More than half of respondents said the business outlook for the next six months is good. Sixteen percent said it's "very good."

Another sign of optimism among small business owners comes via a shift in U.S. Small Business Administration lending.

Lenders at The Bank of Holland say three-quarters of the SBA-backed loans they handle these days are for small business owners who are growing their company, either through a facility expansion, a major capital purchase or an acquisition. That's a significant change from late 2011, when three-quarters of SBA loans were going to refinance existing debt.

Improvements in the economy have small companies — those that came out of the recession in relatively good shape — confident enough to make an investment for the future, said Brad Dyksterhouse, senior vice president of business resource lending at The Bank of Holland.

"There's more optimism — 'good things are around the corner,'" Dyksterhouse said. "The businesses that are strong and weathered the storm are seeing this as an opportunity."

As small business owners show greater optimism and report improved fortunes, economist Brian Long's monthly survey of industrial purchasing managers continues to find lingering concerns about the national and global economics and their potential affects locally.

In the Kalamazoo area, the June index for new orders improved slightly. Indexes for production, employment and purchases all declined from May, although each stayed well in positive territory.

"In fact, since the beginning of the recovery from the recession, Southwestern Michigan has remained stronger than most of Michigan. However, our local statistics are clearly the brightest part of this month's report. The national and international reports are not positive, and may mean that Southwestern Michigan may soon be drawn down to a lower level," Long wrote in his monthly report on the Kalamazoo-area economy.

In the Grand Rapids area, the economy is "still growing, but slowing," said Long, the director of supply chain management research at Grand Valley State University's Seidman College of Business.

The key sales index for June declined in the Grand Rapids area from May and the index for purchases stayed the same. The production index inched up a single point and employment grew solidly, from a 12 to a 25.

"Overall, our current statistics are still positive, but less robust than what we would like to see. Even though the local economy is still growing, the future is starting to look far less certain than it did a few months ago," Long wrote in his report for June on the Grand Rapids area.

Statewide, University of Michigan economists in May predicted job growth of 57,400 jobs in 2012, compared to 63,800 in 2011.

"Job growth at the beginning of 2012 set a blistering pace, a tempo too brisk to sustain, and we see growth backing off to a much more moderate pace for the rest of 2012, tracing a pattern similar to 2011. Job growth then runs a little stronger during 2013 than over the last nine months of 2012," U of M economists wrote in their most recent outlook. An updated outlook is due out in September.

U of M projects the growth of 49,800 jobs in 2013 for the state.

Read 1193 times Last modified on Friday, 07 December 2012 11:37

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