By Staff
West Michigan business confidence has suffered a marginal decline and is expected to be flat for 2006, according to an annual report from Grand Valley State University experts.
According to the annual report, employment growth is expected to be modest, at best 0.5 percent for 2006.
Overall sales are expected to grow around 3 percent - a rate comparable to last year.
Exports continue to be a bright spot; expected growth is 5 percent for 2006.
The report was written by Hari Singh, Ph.D., and Nancy Boese, M.B.A., of Grand Valley's Seidman College of Business. Singh is chair of the Economics Department. Boese is the regional director of the Michigan Small Business and Technology Development Center.
The forecast is based on a November 2005 survey of businesses in the greater Grand Rapids economy (Kent, Ottawa, Muskegon, and Allegan counties).
The survey was mailed to the CEOs of 675 organizations based on a representative sample reflecting different sectors of the regional economy and the geographical diversity of the region.
A total of 151 organizations responded.
The survey aims to historically track the overall business confidence of the Grand Rapids metropolitan area by a confidence index.
This confidence index is scaled from zero percent (no confidence at all) to 100 percent (complete confidence).
Results this year indicate that business confidence of the private sector is 65.3 percent, down from 69.6 percent in 2005.
The pragmatic optimism of recent years has been replaced by the notion that things are not likely to improve for a while.
In 2005, expectations of higher interest rates, rising energy prices, the uncertainty due to the war on terrorism and weak job growth prospects because of restructuring further depressed expectations, the report says.
Following well-publicized layoffs by major corporations in the West Michigan area, the regional labor market has been repairing at a slow pace.
Traditionally, the regional and national economies have followed similar business cycle trends.