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Published in Economic Development
Survey of Michigan business executives shows growing economic optimism Business Leaders for Michigan

Survey of Michigan business executives shows growing economic optimism

BY Tuesday, February 23, 2021 04:31pm

A growing number of business executives anticipate higher employment and capital investments over the next six to 12 months as post-pandemic economic outlooks are increasingly optimistic, according to a recent survey by Business Leaders for Michigan.

The January 2021 survey of 56 executives shows growing confidence in both statewide and national economic outlooks from the third to fourth quarter of 2020. Meanwhile, 84 percent of executives surveyed expect employees to return to in-person work by the third quarter of this year.

The main factors influencing the economic rebound are vaccine distribution and acceptance, federal stimulus funding, and employers’ capital and employment spending, according to Business Leaders for Michigan, a statewide business roundtable.

“As vaccine distribution ramps up and economic confidence continues to expand, there’s reason to be optimistic about the future,” Business Leaders for Michigan President and CEO Jeff Donofrio said in a statement. “Yet even with robust growth and continued federal stimulus funds, it could still take years for employment to recover to pre-pandemic levels.”

Roughly 84 percent of survey respondents expect the state’s economy to remain the same or improve during the next six to 12 months, a 6-point increase from the organization’s prior survey in the third quarter of 2020. The statewide economic outlook improved more than the national outlook in the survey. 

Around nine out of 10 respondents also anticipate stable or expanded investments in employment and capital over the next six to 12 months.

Donofrio added that the vaccine rollout and ability to reach herd immunity, COVID-19 variants and political disputes continue to make economic recovery uncertain.

Additional forecasts

The University of Michigan Research Seminar in Quantitative Economics also recently released its U.S. economic outlook for 2021 and 2022 that forecasts the annualized real GDP growth rate to increase from 3.6 percent currently to 5 percent to 5.5 percent in the second and third quarters of this year. 

Researchers also expect the U.S. unemployment rate — at 6.3 percent in January — to average 5.8 percent in 2021 and 4.8 percent in 2022.

Comerica Inc. economists projected earlier this month that Michigan’s economy is poised to benefit as U.S. demand for automobiles and other durable goods continues to grow this year.

“Massive fiscal stimulus followed by increased infrastructure spending, possibly enhanced by significant federal support for families with children, will lift national demand for Michigan products in 2021,” Comerica economists wrote in a Feb. 11 outlook.

The economists similarly noted that vaccine disruptions and COVID-19 variants remain as risks to the economic recovery.

“However, we expect vaccine distribution to ramp up and provide meaningful protection for the majority of the U.S. population by the end of this year, fortifying business and consumer confidence and providing the necessary conditions for the spend out of pent up demand,” the economists wrote.

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