With falling unemployment and rising gross domestic product, Michigan’s economic recovery is in full motion thanks largely to the state’s focus on diversifying the economy, says a new report from RBS Citizens.
While Michigan’s automotive manufacturing GDP dropped from $33 billion in 2007 to $6 billion in 2009, today, General Motors Co., Ford Motor Co., and Chrysler Group are posting their best sales in six years, respectively. In turn, Michigan now claims the fourth largest technology workforce in the nation, according to the Organization For International Investment.
“Automotive will always be incredibly important to the state, but now we have other (industries) like technology and life sciences that are becoming a more important part in the overall economy here,” says Rick Hampson, Michigan president of Charter One and RBS Citizens.
The report cites forecasts from the University of Michigan projecting the state’s top job producers will be in the professional and business services as well as the trade, transportation, and utilities sectors over the next two years.
Hampson also attributes concerted efforts between state lawmakers and economic leaders as a key piece of the improving economic landscape. “There’s just a lot of great collaboration that’s going on here. There may be areas where we could improve (our position) as a higher ranked state, but my general feeling is that everything is looking very positive.”
Between 2012 and 2013, Michigan GDP per capita rose 1.9 percent, while the national average was 1.1 percent, according to the report. Likewise, Michigan home prices are up 42.6 percent since 2009, and 62 percent of business owners reported being satisfied with the state’s economy in the June’s Michigan Future Business Index survey.
Additionally, Comerica’s Michigan Economic Activity Index showed an increase in June, climbing 3.7 percentage points to a level of 127.8. The latest index averaged 125 points for all of 2013, 11 points above the index average for 2012.
“Payroll job growth in Michigan increased in May, June, and July, breaking out of an ominous stall pattern that extended through the end of 2013 into early 2014,” says Robert Dye, chief economist at Comerica Bank. “National auto sales were strong through midsummer and that has spurred production increases for Michigan-based assembly plants and suppliers. State sales tax revenues are trending up this year, showing that improved household finances and confidence are being felt at Michigan retailers.”