Published in Economic Development

Reports: Michigan economy, ranking as business-friendly state improve

BY Sunday, May 06, 2018 09:03pm

New economic data shows Michigan’s economy continues to improve, even as the state remains in the middle of the pack for business according to a ranking from national executives.

Michigan’s real gross domestic product (GDP) grew 2.3 percent from 2016 to 2017, more than any of the neighboring states, according to data released on Friday morning by the U.S. Bureau of Economic Analysis (BEA).

The state of Washington led the nation over the same time period with real GDP growth of 4.4 percent, while Connecticut’s GRP contracted 0.2 percent, according to the BEA data.

Michigan’s real GDP also grew 2.4 percent from the third quarter of 2017 to the fourth quarter, however Wisconsin, Illinois and Indiana all had better GDP growth over that same period.

Likewise, Grand Valley State University economist Brian Long noted the West Michigan economy continues to outperform typical patterns.

While the index for new orders, production and purchases dipped slightly in surveys from the last two weeks of April, they all remained solidly in positive territory, according to Long, the director of supply management research at the GVSU Seidman College of Business.

Long noted the automotive supply chain manufacturers “are still modestly expanding despite the slight downtick for the industry as a whole.” Meanwhile, the survey shows the office furniture industry have reached a peak of its current business cycle.

“Obviously, it’s doing so at a very good level, and we don’t see any radical decline going on, but we can’t expect more expansion. We’re as good as it’s going to get as far as the office furniture industry in West Michigan right now,” Long said.

However, with unemployment at 4.7 percent in Michigan and payroll jobs increasing on a year-over-year basis, many companies report they are struggling to find personnel, whether for truck drivers, production workers, and part-time summer help, according to Long’s survey.

Another improving metric: National executives increasingly perceive Michigan as a business-friendly state, although the state remains in the middle of the pack in a country-wide ranking.

Chief Executive Magazine this week released its 14th annual Best & Worst States for Business survey showing that Michigan ranked as the 27th best state for business, up nine spots from the previous year and the second biggest gain in the country behind Rhode Island.

For his part, term-limited Gov. Rick Snyder used the higher ranking to tout the effectiveness of his initiatives to boost the state’s overall economic performance.

“This new survey shows Michigan has come a long way in a short amount of time,” Snyder said in a statement. “It also proves we are moving in the right direction and laying the foundation for sustainable, long-term success. We are creating a better business climate ready to attract the hundreds of thousands of good-paying jobs coming back to our state in industries like manufacturing, information technology, health care and other professional trades.”

Michigan has created about 540,000 private-sector jobs since 2011, according to the state.

The administration also touts new economic development incentives like “Good Jobs For Michigan” and “MIThrive” that allow employers and real estate developers to capture additional tax revenue for large, “transformational” projects, as MiBiz has previously reported.

Snyder administration officials say they believe that new workforce development initiatives such as the proposed “Marshall Plan for Talent” will further propel the state’s economic performance.

“Michigan is not letting up, nor will it sit on the sidelines. This survey reaffirms we’re headed up the right path, but there’s still more work to be done,” Roger Curtis, director of the state’s Talent and Economic Development (TED) department, said in a statement. “Through efforts like the Marshall Plan for Talent, we will continue to push Michigan even further in the race for the best place to do business and find talent.”

Read 10535 times Last modified on Sunday, 06 May 2018 21:35