Michigan’s investment climate may be unclear, but the state will continue to strengthen as an automotive engineering centre, according to 50 North American auto industry executives surveyed recently by KPMG LLP.
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According to the results, 30% of the executives surveyed said they expect the investment climate in Michigan to improve over the next five years, while 30% expect it to remain the same, and 30% expect it to worsen. Looking back over the past five years, 30% of the executives surveyed said Michigan’s investment climate had remained the same, and 44% felt it had worsened. Only 14% said that the investment climate had improved.
“As the survey highlights, high labour costs and a sluggish economy have had an impact on the growth of new business,” said Jeff Dobbs, managing partner for KPMG in Detroit. “It is somewhat gratifying to see the executives expressing more optimism for investments in Michigan going forward, coming at a time when automakers are heavily focused on investment opportunities in China.”
Of the executives surveyed, 52% said the most important criteria for doing business in Michigan is a growing economy. 26% said tax incentives are the most important criteria. 16% said a skilled labour pool is the most important criteria.
Despite the mixed investment climate outlook, executives expect the state to remain a strong engineering centre. 44% of the executives said they expect to see an increase in the building of new engineering facilities, while just 10% expect a decrease in the number of new facilities.
“Michigan has established itself and continues to establish itself as a leader in automotive technology and innovation, said Dobbs. “Couple this with the expectation for increased engineering facilities expansion, and the state is on course to continue to attract and retain top professionals in engineering, technology, finance and management.”
In reviewing the most important automotive product innovations, auto executives surveyed, in priority order, pointed to fuel-cell technology, safety innovations, telematics and engine management systems. Furthermore, 63% felt that the new product development cycle will decrease dramatically in the next five years, and 64% of the executives felt that new technologies would be one of the most important issues impacting a consumer’s purchase decision in the next five years.
