While jobs, income, and home values continue to climb in the Detroit region, the area also saw the lowest foreign investment in the state in five years, according to today’s release of the Detroit Regional Chamber’s State of the Region report for 2019-2020.
The data covers a population of 5,421,194 as of 2018. Of this, 672,662 people lived in Detroit, and Michigan’s population was 9,995,915. The 11-county region encompasses more than 300 municipalities and 7,062 square miles. There are more than 300,000 businesses including 10 Fortune 500 companies and 300 foreign firms from 38 countries.
“The region has continued to progress over the past year,” says Sandy K. Baruah, president and CEO of the chamber. “Job growth, office and industrial vacancy rates, and median home values are all a testament to that. Over the past five years, the region has experienced significant median household income growth of 15.3 percent since 2014, rising to $60,513.
“This report not only highlights where the region is performing well, it also showcases areas for continued improvement. This past July, the unemployment rate increased for the first time since 2009 and, despite increases in values, the region is last among peers in key economic indicators including educational attainment and labor force participation. Detroit’s poverty rate, while declining over the past five years, still remains the highest among peers. Progress is being made, but we cannot take our eye off the prize.”
The Detroit regional economy continues to grow in jobs, per capita income, median home values, and educational attainment. Population, labor force participation, and poverty rates have improved slightly. However, growth has decreased for exports, housing permits, and foreign direct investment over the past year, while unemployment rates increased slightly.
Real GDP growth in Michigan from 2014-2018 was 8.8 percent, below the national average of 10.2 percent. The growth is 8.9 percent for Detroit, below the national average of other cities at 9.4 percent.
The labor force participation rate in Detroit in 2018 was 62.6 percent, below the national average of 63.3 percent. The unemployment rate in the Detroit region was 5.3 percent in July, compared to the national rate of 4.0 percent.
From 2014-2018, private sector job growth was 7.7 percent in Detroit and 8.2 percent nationally. The Detroit region’s largest industries include health care and social assistance (13.9 percent), government (12.4 percent), manufacturing (11.7 percent), and retail trade (10.1 percent). Its smallest is transportation and warehousing, at 3.4 percent.
Per capita, income grew 18.2 percent from 2014-2018 in the Detroit region, above the nation’s 17.1 percent.
In Detroit, office vacancy rates were 9.4 percent in the first quarter of 2019 and 9.1 percent in the second quarter. Both values are just below national figures. Detroit industrial space vacancy rates were 3.1 percent and 3.2 percent, respectively, below the nation’s 5 percent for both.
Residential construction permits grew 13.8 percent from 2014-2018 in Detroit, compared to the nation’s 26.9 percent.
Ford Motor Co. and General Motors Co. are the two largest Fortune 500 companies in the region, respectively. The largest private companies are Penske Corp. and Rock Ventures.
Detroit’s population from 2014-2018 grew 0.3 percent, below the national average of 2.8 percent. Millennial population growth for the Detroit region was 10.9 percent over the same time period, while the national growth was 4.7 percent.
Median home value growth was 32.2 percent for the Detroit region from 2014-2018, higher than the nation’s average of 26.8 percent. Median household income growth for the same time period increased 15.3 percent, just below the nation’s 15.4 percent.
Detroit’s poverty rate in 2018 was 33.4 percent, far above the U.S.’s 13.1 percent.
In 2018, more than 42.6 million trips occurred across the Detroit region’s four transit systems, a 0.6 percent increase over the previous year. The region was one of the few large metropolitan areas that experienced growth in bus ridership, up 240,000 riders from 2017-2018, according to the National Transit Database.
Between 2014 and 2018, the region’s population with associate degrees or higher grew by 1.9 percentage points to 40.7 percent, below the national average of 41.2 percent.
Nationally, the University of Michigan was ranked No. 25, while Michigan State University was ranked at 84.
In the Detroit region, for every 100 ninth grade students in 2008, 77 graduated high school in 2012, 57 enrolled in college, and 30 earned a degree or credential by 2018.
In 2017, the Detroit Public Schools Community District saw an increase of 10 percent in enrollment, more than 1,000 school-based positions added, a decrease of 7 points in chronic absenteeism, and an increase of 8.6 points in fourth grade math at or above basic achievement levels.
In the Detroit region, 83 percent of students graduated high school in 2018. This is below the national average of 85 percent and above Detroit’s 69 percent. About 69 percent of Detroit residents ages 18-64 without a high school diploma are either not in the labor force or are unemployed.
In the Detroit region in 2017, 36 percent of students were considered college-ready (earned a 1060 or higher SAT score). This number is 51 percent nationally and 9 percent in Detroit. About 58 percent of Macomb, Oakland, and Wayne county students completed their Free Application for Federal Student Aid in 2019.
About 10 percent of Detroit students graduated from a two-year program six years from initial enrollment in 2012. This number is 29 percent for the Detroit region and 39 percent nationally. For four-year programs, 37 percent of Detroit residents graduated, 68 percent for the Detroit region, and 66 percent nationally.
By occupation, the transportation and material moving, architecture and engineering, and computer and mathematical jobs each grew by 14 percent over the four-year period, the highest of any industries. Job growth in stem occupations for Detroit was 10.6 percent, compared to the nation’s 9.9 percent.
The largest skilled trade occupations in 2018 included assemblers and fabricators with 60,224 jobs; laborers and freight, stock, and material movers, hand had 37,358; and heavy and tractor-trailer truck drivers had 31,099 jobs.
Michigan saw an increase in patents granted from 2014-2018 by 30.6 percent, while the national average was 4.5 percent.
Across the state, 27 venture capital funds manage $3.7 billion in funds, and venture-backed startup companies operating in Michigan have increased by 37 percent. About 50 percent of these funds go to life science and health care, and 32 percent go to information technology. The private sector spends about $19.1 billion on research and development, and Michigan ranks third in the nation for private sector investment behind California and Washington.
Since 2014, foreign-held companies have committed to 300 projects in the state, investing more than $9.6 billion and creating more than 37,500 jobs. In 2018, the state received investment from 50 projects totaling more than $1 billion that are expected to add more than 4,800 jobs to the state’s economy. This is the lowest investment in the past five years. Michigan ranks ninth among all states in total number of projects.
Detroit had $44.1 billion in exports in 2018, a 3.1 percent decline.
In 2018, the Detroit region was home to more than 446,550 foreign-born residents, which has increased 11.1 percent over the past five years. Since 2012, Wayne County’s immigrant population has grown by 24.1 percent, while the overall population has decreased by 2.2 percent.
There are 115,000 engineers in Michigan, ranking third in the nation, and 19 percent of U.S. automotive manufacturing jobs are in Michigan. Of the top 100 automotive suppliers to North America, 96 have a presence or headquarters in Michigan. The Detroit region accounts for 13.2 percent of the nation’s automotive manufacturing workforce. The average wage for automotive manufacturing in the Detroit region in 2018 was $80,330, compared to the national average of $63,884.
In 2018, Michigan’s automotive production totaled 1.8 million units, a decrease of 20 percent over the past five years; Michigan continues to lead among all states in light vehicle production.
From 2014-2018, the Detroit region’s defense footprint saw a 360-percent growth in defense contracts. The number of awarded contracts has increased to $3.6 billion in 2019. The state’s defense industry had an economic impact of more than $13.1 billion in 2018.
