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Friday, 19 July 2013 15:00

SBAM survey shows renewed optimism in Michigan economy

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Small business owners and entrepreneurs in Michigan have more to smile about than just the pleasant summer weather.

That’s according to the results of a survey by the Small Business Association of Michigan (SBAM) released in July. It’s key finding: Small business owners have plenty of data indicating that some of the state’s largest industries are returning to a sense of normalcy after bottoming out during the “Great Recession.”

The survey, which characterized the findings as a “discernible uptick in small businesses optimism,” sampled 1,000 small business owners and showed that entrepreneurs and owners are more confident about the future of their businesses than when the last survey was conducted in October 2012.

Michael Rogers, vice president of communications for SBAM, noted that at least part of the reason for the increased confidence is related to the timing of the previous survey, which took place during the run up to the 2012 election.

“Small business was sitting on the sidelines,” Rogers told MiBiz, noting that many businesses were worried about which way the state Legislature would swing.

Rogers said small businesses now know the legislature is working in their favor.

“It helps explain some of the good news,” he said.

The latest survey also showed good news on the employment front. In SBAM’s October 2012 survey, 21 percent of participants said they planned to increase their then-current levels of employees. Ten months later that level has increased to 28 percent.

“You take a chance when you hire someone,” Rogers said. “It’s always telling that (employers) are putting money where their mouth is.”

A major topic in the Michigan business community of late has been the so-called “talent gap,” where companies in tool and die, information technology, food processing and other industries say they can’t find the skilled workers to hire to fill the open positions they currently have.

There has been considerable debate over how to handle this issue. Some experts, such as George Erickcek, senior analyst with Kalamazoo’s Upjohn Institute for Employment Research, suggested that wages must rise if people are in short supply, as MiBiz previously reported. Meanwhile, the state has a number of talent-driven programs to try to better match employers with the necessary skilled workers.

Rogers said he has heard the argument made both ways. However, he pointed out that this latest survey indicated that 28 percent of small business owners plan to raise wages in the next six months. This is compared to just 8 percent in June 2011. The West Michigan area, in particular, is at the forefront of raising wages for workers since more than 30 percent of employers surveyed from the region planned to raise wages to attract the needed workforce, he said.

Despite a lot of positive trends emerging from the latest SBAM survey, Rogers said it did indicate some factors that can keep entrepreneurs and small business owners up at night.

For one, the slow implementation of the Affordable Care Act is causing small businesses to have uncertainty, Rogers said. Recently, the Obama administration announced that the mandate included in the legislation that required any business with more than 50 full-time employees to provide health coverage would be delayed for one more year. The provision was to have taken effect at the start of 2014.

While Rogers pointed out that most of the companies with more than 50 employees already provide health care benefits, many small businesses have expressed concern that the requirement could hinder growth over time.

“Even if you only have 10 or 12 employees, you’re worried about what happens if you get to 50 (employees),” Rogers said.

While SBAM has been vocally opposed to the Affordable Care Act and has been hoping for its repeal, the group has been very much in favor of Gov. Rick Snyder’s recent attempts to expand Medicaid coverage throughout the state, a program made possible by the passage of the ACA.

“Our position is that we may not like (the ACA), but it is now the law of the land,” he said.

Despite always-present concerns about health care reform as well as other unforeseeable economic issues that may arise, Rogers said that his organization is pleased with the overall direction the state is headed in relation to working to grow small businesses.

But the state still has a ways to go to fully embrace a culture of entrepreneurship, in which it trails regions such as California’s Silicon Valley, he said.

“In Michigan, too often, after getting out of college, the goal is to get a good job and stick with it,” Rogers said. “We don’t reward taking a (business) risk.”

Read 2359 times Last modified on Monday, 22 July 2013 08:45

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