The latest economic outlook from Business Leaders for Michigan shows far less optimism for the future among the state’s business executives.
In the quarterly poll, only 31 percent of respondents said they held a positive view for the U.S. economy over the next six months, and just 22 percent believe Michigan’s economy will improve during the same period.
Both results are down sharply from the second quarter survey by Business Leaders for Michigan, when 79 percent of respondents had a favorable view of the U.S. economy and 57 percent expected the Michigan economy to keep growing.
“After nearly a decade of very strong growth, we’re starting to see some uncertainty reflected in these survey results,” said Doug Rothwell, president and CEO at Business Leaders for Michigan. “Much of it is likely connected to the November elections and what our nation’s and state’s future economic policies will look like. Now, more than ever, it is important for our state to remain cohesive and united behind a clear plan for a keeping Michigan competitive.”
Even fewer executives answering the organization’s third-quarter survey offered optimism for the longer term.
Just 22 percent said they felt optimistic about the U.S. economy over the next 18 months, continuing a decline that started in the second quarter when nearly two-thirds still expected further improvements nationally. More than half of respondents expect the U.S. economy to decline in the next year and a half.
Only 9 percent expect Michigan’s economy to continue to improve, while 53 percent believe it will “stay about the same,” and 37 percent expect a decline.
The outlook projects slower job growth to persist for the state.
Those expectations came out after the University of Michigan issued an updated economic outlook for the state that projects slower job growth in 2019 and 2020. U-M economists estimated the state added 7,600 jobs in the third quarter, down from the 9,700 in the second quarter and a “whopping” 24,100 in the first three months of 2018.
“We see the pace in the second and third quarters as the new normal over the next few years,” U-M economists wrote in their latest state economic briefing this month.
However, even slower job growth will keep the labor market tight and push Michigan’s unemployment down to 3.8 percent by 2020, compared to an average of 4.4 percent so far in 2018, according to the U-M outlook.
Nationally, an economic briefing U-M issued a month ago projects Real Gross Domestic Product growth in the U.S. to decelerate from a projected 2.9 percent this year to an average of 2.8 percent for 2019, and 2 percent in 2020.
Light vehicle sales should edge down from a projected 17 million units in North America this year to 16.9 million units in each of the next two years, according to the outlook.
Meanwhile, Comerica Inc.’s latest U.S. outlook issued earlier this month projects Real GDP growth of 3.4 percent for the fourth quarter and 2.9 percent for all of 2018, followed by an average of 2.7 percent in 2019. By the end of next year, Real GDP growth will dip to 2.1 percent in the fourth quarter, according to Comerica.
Auto sales should dip to 17.1 million units this year from 17.2 million last year, and to 16.7 million units in 2019, Comerica economists predict.