Check out a recent survey by Crain’s Detroit Business. There’s definitely some insight we can get from this survey on the future of the Detroit area.
Survey finds pessimism about the present, some hope for the future
By Bill Shea
An overwhelming 96 percent of respondents in a new survey of 300 Crain’s Detroit Business subscribers say they are dissatisfied with Michigan’s economy, and 87 percent say the state’s financial plight is their biggest obstacle to recruiting new talent from elsewhere.
However, 53 percent believe the state’s fiscal picture will at least remain the same or improve next year, according to the results of a Nov. 5-7 survey for Crain’s and Honigman Miller Schwartz and Cohn L.L.P. It was conducted by Lansing-based research firm Epic-MRA and has a margin of error of plus or minus 5.7 percent.
Not among the optimistic respondents is Jim Best, owner of Detroit-based Post Electric Inc., who no longer does any work in Michigan and watched his workforce dwindle from 150 to himself here. He has a small operation in North Carolina, and remains in Detroit only because his daughter is still in school.
“I have no hope whatsoever for the state of Michigan. I see no light at the end of the tunnel,” he said, adding that he hopes the new administration in Washington spends money on the sort of work his company does.
“I believe they’re going to spend billions, and hopefully some of that will go to infrastructure,” he said.
When it comes to a dozen individual industry sectors, 72 percent of survey-takers believe the so-called “green” industries will improve next year, followed by alternative energy (68 percent) and life sciences and biotechnology (63 percent).
Pessimism reigned for the automotive manufacturing sector, where 76 percent believe things will get even worse in 2009 and just 8 percent say it will improve. That was followed by commercial real estate (56 percent) and construction (52 percent) in terms of gloomy outlook for next year.
Angela Story-Krug’s Canton Township-based Event Source Productions Inc. doesn’t do much work for the auto industry, but it did pick up some this year: Job fairs for Ford Motor Co. employees facing layoffs.
Even with the state’s economy in shambles, she believes Michigan affords plenty of opportunity, especially compared to places she worked in the past, such as Tennessee and Florida.
“When you come up here, the level of cash that flows is dramatically different,” she said. “There are still a lot of opportunities here.”
There was less gloom when respondents were asked about the outlook for their own business in 2009: 76 percent said things will at least remain the same or improve.
Donald Rafal’s opinion on his own company’s outlook changed since he took the survey because of the deepening problems with General Motors Corp. and the rest of the domestic auto industry.
“I don’t think things are going to get better in 2009,” said Rafal, who owns Rafal Spice Co. in Detroit’s Eastern Market. “They’ll stay the same, or get a little worse, if all the layoffs occur.”
The survey-takers were mainly service providers (64 percent), or provided goods and services both (17 percent) or just sold a product (19 percent). The median amount respondents’ businesses generated annually was $1.7 million.
At 66 percent, the quality of the region’s universities and other training resources for continuing education topped the list of seven potential selling points of metro Detroit used to recruit talent from outside the area.
That’s actually down from 71 percent in a similar survey two years ago.
“As our industry continues diversify away from automotive, we’re able to draw a nice group of talent to the area because of those (universities),” Story-Krug said.
Least used was the quality of the K-12 school systems in the region and the strong racial and ethnic diversity (both 37 percent) — a departure from 2006, when 55 percent said they used local schools and 59 used racial and ethnic diversity to attract employees from elsewhere.
There were much stronger opinions on recruiting land mines.
Besides the nearly 87 percent who say Michigan’s economy is their biggest hurdle in recruiting out-of-state talent, 85 percent said the region’s economy being too focused on the auto industry is among the obstacles.
That’s up from two years ago, when 75 percent of survey-takers cited the state’s economy as the top hurdle and 70 percent cited the auto manufacturing focus.
Those who said Detroit’s perception of being crime-ridden was a recruiting liability rose from 69 percent to 79 percent.
Lack of a vibrant center city (57 percent) and lack of regional mass transit aside from buses (53 percent) also were listed.
Respondents were split on the region’s infamous winter weather as a recruiting obstacle, with 38 percent saying it’s a liability while 37 percent it wasn’t a problem.
When asked what other recruiting liabilities they face, 4 percent of survey-takers cited unions, and remaining issues didn’t garner more than 2 percent, including the Michigan Business Tax and racial tension.
Southern states (41 percent compared to 40 percent in 2006) are where most potential employees are lost to, respondents said, followed by other Midwestern states (18 percent), Western states (12 percent) and the East (5 percent). The remainder didn’t know, didn’t answer, or said the lost candidates went elsewhere.
With the Detroit 3 reporting losses in the billions, cutting thousands of jobs and facing uncertain futures while Washington ponders bailout loans, 66 percent of survey-takers said laid-off blue-collar autoworkers had hardly or none of the skills that would be transferable to their industry or business.
That’s up from 41 percent two years ago.
Just 12 percent said those workers had the skills to work for them, down from 17 percent in 2006.
The results were a little more positive for white-collar workers, where 23 percent said they would have all or most of the skills needed to be hired. That’s versus 39 percent, who said those jobless workers wouldn’t have the abilities they’d need.
But two years ago, a similar poll revealed that 45 percent had most or all the skills needed to switch jobs, against just 13 percent as having few or none of the abilities sought.
Part of the change can be attributed to differences in what businesses responded, and a larger survey pool in 2006.
