Michigan future business index survey
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Mike Britt – President Accident Fund Insurance Company of America. Michigan Future Business Index Survey. Introduction. Michigan Future Business Index (MFBI) Conducted semi-annually since 2006 by Accident Fund in partnership with Marketing Resource Group, Inc. and Michigan Business Network

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Michigan Future Business Index Survey

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Michigan future business index survey

Mike Britt – President

Accident Fund Insurance Company of America

Michigan Future Business Index Survey


Introduction

Introduction

  • Michigan Future Business Index (MFBI)

    • Conducted semi-annually since 2006 by Accident Fund in partnership with Marketing Resource Group, Inc. and Michigan Business Network

    • Surveys owners of small- to medium-sized businesses in Michigan

      • Gain perspective of State’s economy

      • Measure expectations for future growth

    • Results provide data to track trends and offer insights into their contribution to regional and statewide economy


Mfbi and accident fund

MFBI and Accident Fund

  • Useful to Accident Fund for taking economic pulse of Michigan business owners

  • Small and midsize businesses are our customers –their opinions on economy are important to us

  • 35% of our revenue comes from Michigan

  • Accident Fund in Michigan for 100 years


October 2012 survey

October 2012 Survey

  • Full economic recovery for Michigan may be on hold for near future

    • Regulatory and health care policies shrinking bottom line

    • Setbacks in national economy

    • Fear of looming fiscal cliff

    • Uncertainty of (then-unrealized) Presidential election

    • Newly realized government mandates

    • Fear of added taxes and health care costs


October 2012 survey1

October 2012 Survey

  • There are signs of recovery materializing

    • Reported growth in sales

    • Plans revealed for new product and service launches

    • Fear of looming fiscal cliff

    • Uncertainty of (the-unrealized) Presidential election

  • Majority still believe Michigan economy trending upward and outlook for business remains positive


Satisfaction with economy

Satisfaction with Economy

  • Satisfaction with state economy remains steady after significant increase from Oct. 2011


Outlook next six months

Outlook – Next Six Months

  • Optimism for future growth remains positive, but growing percentage report shrinking bottom line

  • Government regulatory policy and “slow economy” seen as top challenge to Michigan business (11%)

    • Cost of providing health care benefits – 10%

    • Keeping/attracting skilled employees – 9%


Outlook next six months1

Outlook – Next Six Months


Hiring next six months

Hiring – Next Six Months

  • 24% of respondents said they plan to hire more employees in next six months

    • Two points lower than June, but nine points higher than Oct. 2011)

  • Outlook for new hires strongest in Detroit area

  • Larger businesses and new businesses (particularly childcare) are hiring most (33%)

  • Manufacturing most likely to lay off workers (17%)


Employee benefits

Employee Benefits

  • For first time ever, we see significant increase in possible reduction of employee health insurance benefits or increasing share employees pay for premium

    • 13% expect to reduce all benefits over next six months

    • 18% expect to decrease health care benefits

    • 28% will increase premiums (up 23% from June)

    • Only 8% don’t expect to increase health care costs


Business tax structure

Business Tax Structure

  • Perceptions of Michigan’s consumer market continue to improve

  • Growing majority of business owners believe the business tax structure is fair

    • 54% rate Michigan’s business tax system as “fair”

    • 8% say they’ll add a new business location within next six months

    • 19% say they’ll add a new product line

    • 23% will add new service


Government regulations

Government Regulations

  • Increased business costs and government regulations are adding uncertainty

    • 36% are encouraged for their businesses 10 years from now (4% drop from June)

    • 36% are concerned

    • 26% now say they’re uncertain about the future of their business (up three points from June)


Summary

Summary

  • Michigan business leaders are not yet going all-in for a full recovery

  • Top three challenges of doing business in Michigan:

    • Government regulatory policy

    • Slow economy/looming fiscal cliff

    • Providing health care benefits

  • Regulatory pressure and health care costs are causing employers to consider reducing employee benefits and limiting wage increases/hiring

  • To minimize uncertainty, Government needs to act quickly to calm concerns over fiscal cliff


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