The Michigan economy has arguably performed well so far this year.
Our $400 billion economy grew 2.2 percent in 2012, according to the Bureau of Economic Analysis, which was right at the national average. During 2013, we have seen approximately 86,000 people added to the labor force and 76,000 added to payrolls, according to the Bureau of Labor Statistics. In addition, home prices and building permits have been increasing during the year, according to the Federal Housing Finance Agency and U.S. Census Bureau.
The Eastern Michigan economy has benefitted greatly from an 11 percent year-over-year increase in vehicle production for the entire U.S., back over the 16 million unit annualized pace for the first time since 2007. Local economic reports indicate that employment gains have been positive this year in the manufacturing and service industries this year in Western Michigan. Tourism officials in Northern Michigan have reported a pick-up in tourists this year.
As we move into the last quarter of the year, there are several challenges for the state’s economy as we move into 2014:
n The start of the bankruptcy negotiations in Detroit.
n An increase to 9 percent in the state’s unemployment rate, partially driven from the labor force increase noted above.
n A slight decline in the state’s leading index, as calculated by the Federal Reserve Bank of Philadelphia.
We will be monitoring these three areas, and looking clues for a better Michigan economy in 2014, as the national data is signaling.
Another bright spot for Michigan: the Bloomberg Michigan Index of 58 companies with a large presence in the state is 23 percent higher year-to-date versus only an 18 percent gain for the S&P 500.
That’s good news for Michigan companies.