Michigan economy headed for recovery or relapse?

Posted on January 7, 2015

Unemployment is declining, automobile sales are strong, and the City of Detroit has shed $7 billion in debt with its recent exit from Chapter 9 bankruptcy.

So Michigan’s economic future looks better than it has in ages, right?

Indeed it does, unless we:

 Get complacent and don’t fix obvious problems (think roads!).

 Or we do dumb stuff, like erect new barriers to investment and job creation.

Two of the state’s top economic development leaders will discuss Michigan’s 2015 economic outlook — and some fresh results from a survey of business executives — on Thursday at a Detroit Economic Club luncheon. More than 500 have already registered to attend, but there was room for about 80 more as of Monday morning.

Rodrick Miller, president of the Detroit Economic Growth Corp., and Michael Finney, who is transitioning from his role as CEO of the Michigan Economic Development Corp. (MEDC) to being Gov. Rick Snyder’s senior adviser for economic growth, will be the speakers. I will be the moderator, and Baker Strategy Group will share results of its recent survey of business leaders.

The Baker survey results show improving confidence. When asked to rate Michigan on a 1-to-100 scale as a place to grow a business, the average among respondents is 73 this year, up from 71 a year ago and 68 in 2013. And 71% said they plan to hire more people in the year ahead.

Miller told me this week that Detroit is “seeing more investment than we’ve seen in the past couple decades. However, it’s not a full recovery. The sobering pill is that a lot of that investment still needs to be subsidized.

“Bankruptcy really allowed us a fresh start,” he added, but Detroit needs a clear strategy to bring in new people and new companies.

Finney said Michigan’s image has improved dramatically since the depths of the Great Recession, when Chrysler and General Motors were rescued by the federal government as scores of auto suppliers and other businesses collapsed.

“It’s a very different dialogue right now,” said Finney, who lead a Michigan delegation to meet with a large group of corporate site selectors in Texas late last year.

“Within days of those meetings,” he added, “we got three or four RFPs”(requests for proposals) related to information technology, software and call-center projects. “That never happened in the past.”

To turn that dialogue into sustainable growth, Michigan must match that talent and skills of its workforce to the needs of growing companies. And Finney said he expects Snyder to propose some ideas in that vein during his State of the State speech Jan. 20.