Michigan’s small and medium-sized businesses are reporting stronger sales and renewed optimism for future growth, but persistent inflation, rising healthcare costs, tariffs and economic uncertainty continue to weigh heavily on profitability, according to the latest Michigan Future Business Index (MFBI) released by Cinnaire and Michigan Business Network.
Conducted by ROI Insight, the Q2 2026 survey of 400 Michigan business leaders found that 35% reported increased sales over the past six months, a nine-point increase over the previous year. Looking ahead, a majority (53%) expect sales to continue growing during the next six months.
Despite improving revenues, businesses are struggling to translate sales into stronger profits. Only 19% reported profit growth over the past six months, while just 41% expect profits to increase in the coming months as inflation, tariffs, healthcare costs and global instability continue driving up operating expenses.
Businesses are also becoming more cautious about expansion. Hiring projections, wage increases and capital investments all softened as employers focus on managing higher costs. Nearly two-thirds (63%) expect to maintain current staffing levels, while 56% say they do not anticipate raising wages over the next six months.
The survey also found:
- Inflation remains one of the most significant challenges facing Michigan businesses, with 85% saying it is negatively impacting their operations.
- Healthcare costs continue to constrain growth, with 65% expecting those costs to increase over the next six months.
- Sixty percent say international tariffs are negatively affecting their business, while 57% report negative impacts from the war in Iran.
- For the first time since the 2024 election, more respondents (41%) say current federal policies are not benefiting their business than those who say they are (33%).
- Even amid these headwinds, 65% continue to rate Michigan as a good or excellent place to do business.
“Businesses in our state still feel Michigan is a very good place to be,” said Chris Holman, CEO of Michigan Business Network. “They continue to be at a standstill with slight revenue projections, but no profit increases though. This is due primarily to uncertainty and tariffs. Because of this, they are not presently hiring, though they do profess a need for talent. They also feel that the federal government is not delivering anything that was promised to help them. It will be a challenging six months ahead.”
Mark McDaniel, President and CEO of Cinnaire, said the findings underscore both the resilience of Michigan’s business community and the importance of continued investment in economic development.
“Michigan businesses continue to demonstrate remarkable resilience, finding ways to grow sales even as rising costs and uncertainty squeeze profits and slow investment decisions,” said Mark McDaniel, President and CEO of Cinnaire. “The survey reinforces that sustained economic growth requires more than optimism. It requires access to capital, workforce development and strategic investment in communities.”
The Michigan Future Business Index is conducted twice annually by ROI Insight on behalf of Cinnaire and Michigan Business Network to measure the sentiment and outlook of Michigan’s small and medium-sized business community. The Q2 2026 survey was conducted between May 19 and July 13, 2026, among 400 businesses across Michigan.