Business Leaders Confident on Economy, But Feel Pains of Labor Shortages

Concerns about labor shortages and inflation are weighing heavy on the minds of Michigan’s business leaders, according to a recently released quarterly economic survey by Business Leaders for Michigan, per a press release.

Labor shortages are being felt across all job categories, including in manufacturing, office and front-line positions, with 85% of survey respondents expecting to have trouble filling positions over the next six-to-12 months, not to mention the economic impact of the Ukrainian-Russian conflict.

“We must take significant steps to address the labor shortage across our state,” said Jeff Donofrio, President, and CEO of Business Leaders for Michigan, in a press release. “Our recent benchmarking study shows Michigan’s labor force participation rate is ranked 41st in the nation, and companies are feeling the effects. The historic state budget surplus gives Michigan a unique chance to increase the number of people with degrees and credentials and remove barriers to work, helping solve these talent gaps.”

About 49% of survey respondents expect inflation to continue at its current rate and 34% expect it to increase over the next six-to-12 months, while 16% say inflation is likely to come down. The biggest impacts of inflation are in materials and wages. Randi Berris, vice president, Marketing & Communications, Business Leaders for Michigan told the Michigan Chronicle that international issues involving the Russian-Ukrainian conflict are being felt much closer to home.

“The first thing that Michiganders will feel will be at the gas pump. Higher gas prices could drive further inflation, as that will affect prices in a lot of other areas, such as groceries,” Berris said.

Despite the challenges, 70% of executives say their business is doing better than before the pandemic. In addition, 55% of executives say the Michigan economy will stay the same, 22% say it will improve and 24% say it will get worse in the next six-to-12 months; 43% say the U.S. economy will stay the same, 28% say it will improve and 28% expect it to get worse.

Other significant findings include:

94% of executives expect their company’s employment and capital investment in Michigan to stay the same or grow over the next six-to-12 months

75% expect their company’s real estate footprint to remain the same, while 4% expect it to increase and 21% expect it to decline over the next six-to-12 months

Business Leaders for Michigan conducted the internal member survey Feb. 1-15. Find out more at www.businessleadersformichigan.com.