Thursday, March 13, 2014
Walsh College Economic Sentiment Survey Reveals Increased Confidence in Michigan Economy
Walsh College alumni’s confidence in economic conditions continue to trend in a positive direction, with Michigan's longer-term economic prospects exceeding that of the country as a whole. According to preliminary findings of the seventh semi-annual Walsh College Economic Sentiment Survey, conducted during the first quarter of 2014, economic confidence in the state of Michigan has increased 94 percent over the past six months, versus 18 percent increase for the country as a whole.
The Walsh Economic Sentiment Ratio©, a weighted ratio of positive-to-negative responses, with a value greater than 1.0 representing a relatively optimistic stance and a value less than 1.0 denoting a relatively pessimistic outlook, was 1.68 for the country (up from 1.42) and 2.04 for the state (up from 1.05).
The sixth round survey, conducted in the third quarter of 2013, indicated that expectations for the respective U.S. and Michigan business climates were closely aligned, although new data suggests a slight divergence in opinion. Survey respondents are moderately more optimistic in respect to the state's business conditions over the next 12 months, with the Walsh Business Sentiment Ratio improving from 0.59 to 0.80. In contrast, the near-term business outlook for the country dipped slightly, from 0.69 to 0.52. [See Table]
Confidence in household finances is moderately high, remaining steady over six months, with 62 percent of respondents expecting their household condition will be “Excellent” or “Good” 12 months from now, and only eight percent concerned that personal finances will be “Not so good” or “Terrible.”
This round of the survey included a Special Module on the City of Detroit’s Economic Recovery. Seventy percent of our alumni respondents indicated they either live, work, or visit the City of Detroit. When asked to rate the level of Detroit’s recovery over the next five years, the responses were mostly neutral to slightly positive with 42 percent saying recovery would be “Okay” and 30 percent expecting the recovery to be “Good.”
Respondents reported spending time in Detroit dining out, participating in cultural and artistic activities, and attending sporting events. When asked about factors expected to stimulate economic recovery, Walsh alumni cited private investment to be of foremost importance, followed by fiscal transparency and political leadership. Overall, respondents believe that a modest recovery is possible over the next five years for both the downtown area and surrounding neighborhoods.
For video commentary by Walsh College’s finance faculty, visit: www.walshcollege.edu/EconSurveyVideo. The survey is designed and implemented by the Walsh College Finance and Economics faculty. Participants include a representative sample of alumni.