Top 10 Benchmarks Show Michigan’s Growth is Comparatively Slow

Business Leaders for Michigan (BLM), a business roundtable in based in Detroit, released its updated benchmarking report comparing Michigan’s performance against the top 10 states.
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Detroit Michigan Downtown skyline Aerial Sunset
According to Business Leaders of Michigan, the state trails the top 10 states in growth in the measured categories despite some gains in the last three years. // Stock Photo

Business Leaders for Michigan (BLM), a business roundtable in based in Detroit, released its updated benchmarking report comparing Michigan’s performance against the top 10 states.

Despite Michigan making gains since the Great Recession, moving from 49th to 29th, the report shows it is struggling to grow as fast or faster than other states. The analysis includes an expanded set of benchmark metrics, along with a growth gauge, to determine where Michigan sits nationally under rapidly changing and competitive conditions, and where it might be headed.

“Michigan is much better off and has come a long way since 2009. However, despite 10 years of economic growth prior to COVID-19, we’re struggling to grow faster than our competitors,” says Jeff Donofrio, president and CEO of BLM.

“As we continue to see economic disruptions from the pandemic, talent shortages and shifts in our economy, including to vehicle electrification and advanced mobility, it’s even more critical that we examine Michigan’s competitiveness and make sure that in the decades ahead we focus on investments and actions that drive growth.”

The metrics included GDP, median household income, and business climate perception. New categories include growth and economic health indicators such as education, labor force participation, net migration, poverty, and business creation.

The data shows Michigan ranks 41 in labor force participation and 44 in its three-year growth rank — which shows the state’s pace of change just over the past three years. For educational attainment and median household income, it ranks 35, with the three-year rank reported at 20 and 40, respectively.

The state ranked 19 in net talent migration with the same three-year rank. Net business creation also was the same in both rankings, coming in at 20. The business climate perception is the state’s best category, ranking 15 overall and second in the past three years. Michigan ranks 34 overall in poverty, but 8 in the past three years, while gross domestic product per capita ranks 36 overall and 37 in three years.

“The recent bipartisan economic development legislation is exactly the kind of ongoing action we need. We’re in a unique moment in our history. Rarely do we have both economic uncertainty and a once-in-a-generation opportunity to invest in our future,” says Donofrio.

“We need smart investments in the coming months and consistent long-term strategies that focus on decades-long growth that won’t fall to the wayside depending on who is in office. Systemic, sustained changes, including in workforce and talent development and customer service, are necessary to change our trajectory from being an average state, to being top 10.”

The states currently in the top 10 are Utah, Washington, Colorado, Texas, Massachusetts, Virginia, California, Oregon, Florida, and Arizona.

Michigan is falling behind many states in these growth categories. While the whole nation saw a dip in labor force participation, Michigan’s decline was greater than the top 10 states — 2.7 percent compared to 1.1 percent. One positive is the slightly faster pace educational attainment is growing in the past three years over top 10 states — 5.4 percent compared to 5.2 percent.

“States have been investing for years to attract businesses, jobs and talent – and many states that aren’t Top 10 today are well ahead of Michigan when it comes to investing for future growth. We can learn valuable lessons from them,” says Donofrio.

“Unless Michigan urgently addresses our economic and educational challenges, we may fall so far behind that we will never catch up. If we invest and work today to overcome these challenges, we can build a prosperous state with a healthy economy and widely shared prosperity.”

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