Printer Friendly

SURVEY FINDS METRO BUSINESSES OPTIMISTIC ABOUT ECONOMY, BUT AUTO INDUSTRY IS KEY TO SUCCESS

 DETROIT, May 10 /PRNewswire/ -- Although they oppose President's Clinton's proposed tax increases, Southeast Michigan business executives are more optimistic about the state's economy than they have been since the boom days of the Reagan administration.
 The 11th annual "Survey of Southeast Michigan Business," sponsored by Deloitte & Touche and Crain's Detroit Business, found an overwhelming majority of respondents predict better times ahead for the region and the nation. Fifty-eight percent of the respondents think the Michigan economy will improve in 1993 and 61 percent think the national economy will improve.
 The expectation of improvement is strongest among respondents in auto-related manufacturing, wholesaling and retailing, and weakest among those in construction, non-auto manufacturing and services.
 "This optimism is largely related to the auto industry," said Pat Mansfield, partner-in-charge of Deloitte & Touche's middle market practice. "Many businesses believe the boom in car sales will affect their businesses."
 The strong impact the auto industry has on the economy of the metro area was evident in another question in which 67 percent said the planned plant closings in the auto industry will hurt their businesses.
 Conducted in March and April, the survey drew responses from nearly 1,000 top-level executives of small and medium-sized companies in Southeast Michigan. Included were companies in manufacturing, retailing, wholesaling/distribution, construction, health care, transportation, insurance, finance, real estate and service industries.
 ECONOMIC OUTLOOK
 Half of the respondents saw their sales increase in 1992, down slightly from the 59 percent which predicted sales increases in last year's survey.
 Asked about their own companies' outlook for 1993, executives expect continued improvement, with 63 percent expecting sales increases. However, the current recovery has produced few jobs, with only 28 percent of the respondents indicating they had increased their workforces in 1992. In fact, while 13 percent expected layoffs a year ago, 30 percent said they had actually done so.
 POLITICS
 Politically, local executives show strong support for Gov. Engler. Eighty-three percent said they approve of how Engler is handling his job.
 "This is not surprising considering 70 percent of the respondents identify themselves as Republicans, 25 percent as independents or no preference and only 3 percent as Democrats," said Mansfield.
 The executives recommended that Engler could best improve the Michigan business climate through changes to reduce workers' compensation costs (35 percent), changes to the business tax structure (27 percent) and containing health care costs (20 percent).
 Most respondents oppose the core of Clinton's economic program. Eighty-one percent said Clinton's "BTU tax" plan for energy would hurt their businesses; 68 percent said an increase in the personal tax rate would be harmful.
 There is more support for Clinton's pro-business agenda than his economic program. Enterprise zones; denying the deductions for lobbying expenses; extending the research and development, low income housing, investment and targeted jobs tax credits; and creating capital gains incentives for small businesses drew support from the respondents.
 THE ENVIRONMENT
 In a new question added to this year's survey, the respondents indicate that environmental regulations have impacted their companies' bottom lines. Sixty-four percent of the respondents said that compliance with environmental regulations has increased the administrative costs of doing business. Twenty percent indicate environmental regulations have created difficulty in selling assets and land; 15 percent indicate it has created difficulties in obtaining financing; and 10 percent indicate it has created the need to hire specialized employees.
 COMPANY BENEFIT PROGRAMS
 The survey found that employers continue to pass on increased health care costs to their employees. Forty percent reported their companies increased medical deductibles in 1992, while 37 percent boosted co-pays. This is slightly up from the 37 percent which increased medical deductibles in 1991 and the 31 percent which increased co-pays.
 Of the possible health care reform proposals, 46 percent of the respondents favor tax incentives to businesses to provide health care coverage for employees and 20 percent favor managed competition involving group care providers. Only 7 percent favor a government-run national health insurance system.
 EDUCATION
 The respondents continue to be critical of the qualifications of Michigan's high school graduates. Thirty-three percent of the respondents rated the graduates as poorly qualified, and another 34 percent indicated that graduates require substantial training. Only 2 percent rated the state's high school graduates as well-qualified.
 By comparison, the grades were somewhat better for Michigan's university and college graduates. Only 5 percent of those surveyed rated college graduates as poorly qualified and 25 percent indicated substantial training is needed. Nine percent classified college graduates as well-qualified.
 FOREIGN TRADE
 Respondents to the survey are not heavily involved in foreign trade; only one company in four exports to other countries or operates outside the U.S., according to the survey.
 "As you might expect, the manufacturing industry, both automotive and non-automotive, have a much higher level of involvement in foreign trade," said Mansfield. "More than half of the manufacturers surveyed have export or overseas operations."
 Countries attracting the greatest interest by respondents are Canada and Mexico.
 DEMOGRAPHICS
 Sixty-two percent of the companies surveyed have annual sales between $1 million and $10 million. An additional 28 percent have sales between $10 million and $50 million. Seventy-two percent of the companies have been in business at least 20 years.
 Seventy-seven percent of the companies came from five industries: retail (16 percent), wholesale/distribution (18 percent), auto-related manufacturing (18 percent), construction (13 percent), and non-auto- related manufacturing (12 percent).
 Deloitte & Touche, one of the nation's leading professional services firms, provides accounting and auditing, tax and management consulting services through 16,500 people in offices in more than 100 U.S. cities.
 The Michigan Practice of Deloitte & Touche has offices in Detroit, Lansing, Ann Arbor, Saginaw, Grand Rapids, and Toledo, Ohio.
 A complete report on the survey can be obtained by contacting Peggy Pentecost at Deloitte & Touche at 313-396-3483.
 -0- 5/10/93
 /CONTACT: Melanie de Vries of Anthony M. Franco, Inc., 313-567-5047, for Deloitte & Touche/


CO: Deloitte & Touche ST: Michigan IN: SU: ECO

JG-ML -- DE003 -- 6368 05/10/93 10:02 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:May 10, 1993
Words:991
Previous Article:SPRINT, DIRECTORYNET TO MARKET ELECTRONIC WHITE PAGES
Next Article:INTREPID, GRAND CHEROKEE RECOGNIZED BY AMERICAN MARKETING ASSOCIATION
Topics:


Related Articles
DETROIT PURCHASING MANAGERS REPORT MINOR SLIP
DETROIT PURCHASING MANAGERS REPORT MINOR SLIP
NOVEMBER SURVEY SUGGESTS FULL-SCALE RECOVERY
PURCHASING MANAGERS REPORT STRONGER AUTOMOTIVE ACTIVITY IN JUNE
PURCHASING MANAGERS REPORT SECOND MONTHLY IMPROVEMENT
STRONGEST MONTH OF THE YEAR REPORTED BY DETROIT PURCHASING MANAGERS
METRO PURCHASING MANAGERS REPORT DECELERATION IN MAY
PURCHASING MANAGERS REPORT WEAK FEBRUARY -- COMERICA SURVEY
DETROIT PURCHASING MANAGERS REPORT STRONG CONDITIONS
State's CPAs guardedly optimistic.

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters