Study: Business Leaders Optimistic About Michigan Economy Short Term, But Not Long

DETROIT— Business leaders voiced optimism about Michigan’s economy in early 2025, but less confident beyond July.

The results of the annual survey from the Ann Arbor-based Baker Strategy Group were presented Tuesday during a Detroit Economic Club meeting. Although sentiment for the next six months moved upward slightly from last year, longer looks at a year and three years were negative year-over-year as inflation persists, interest rates challenge affordability and President Donald Trump, who split respondents’ opinions (41% positive and 43% negative), was sworn in Monday.

“There seems to be a bit of optimism in early 2025 with an improvement,” said David Baker, managing partner at the consulting group, “but there’s still a great deal of uncertainty about overall economic conditions.”

The new administration suggests some major changes that could have large economic impact, particularly around tariffs and trade. Trump on Monday said 25% duties on Canada and Mexico could take effect as early as Feb. 1. Meanwhile, the president also communicated plans to evaluate rolling back tax credits for electric vehicles and greenhouse gas tailpipe emission and fuel economy regulations as he repealed his predecessor’s target for electrified vehicles to represent half of U.S. new vehicle sales in 2030.

“I think there’s a tone of optimism about 2025, partly related to the new administration,” said Daniel Brody, 48, of Royal Oak, who works in the steel and automotive industry. “For automotive, it seems back to basics and letting people buy what they want. It seems it was too much too fast, and now there’s a pullback.”

The Baker group’s survey, conducted following the election of 650 participants, found 50% of respondents had a positive view of the Michigan economy while 30% had a negative view. In 2024, it had been 36% positive and 38% negative.

Outlooks for varying time frames were put on a 100-point scale with 100 being excellent. Six-month outlook was 68, up from 67. One year came in at 70 compared to 2024’s 71. The three-year outlook was at 72, down from 75. Fewer said they would recommend Michigan, too, falling to 65 from 71.

Respondents also reported increasing sentiment on Michigan being business-friendly and on the right track, but the state took declines in being a great state to raise a family, for young professionals and having a strong, vibrant economy.