Michigan CEOs confident in Michigan economy, concerned about labor shortages and inflation

DETROIT — Worries about labor shortages and inflation are weighing on the minds of Michigan business leaders, according to a quarterly economic survey released today by Business Leaders for Michigan.

Labor shortages are being felt across all job categories, including manufacturing, office and front-line positions, with 85% of survey respondents expecting to struggle to fill positions over the next six to 12 months.

“We must take significant steps to address the labor shortage in our state,” said Jeff Donofrio, president and CEO of Business Leaders for Michigan. “Our recent comparative analysis shows Michigan’s labor force participation rate is ranked 41st in the country, and businesses are feeling the effects. The state‘s historic budget surplus gives Michigan a unique opportunity to increase the number of people with degrees and credentials and remove barriers to work, helping to address these talent shortages.

About 49% of survey respondents expect inflation to continue at its current rate and 34% expect it to rise over the next six to 12 months, while 16% say inflation should come down. The biggest impacts of inflation are on materials and wages.

Despite the challenges, 70% of leaders say their company is doing better than before the pandemic. Additionally, 55% of executives say Michigan’s economy will stay the same, 22% say it will improve, and 24% say it will get worse over the next six to 12 months; 43% say the US economy will stay the same, 28% say it will improve and 28% expect it to get worse.

Michigan Business Leaders conducted the internal member survey from February 1-15, 2022.