MEDC Feels Recovery Coming Next Summer
And they told the MEDC that the first half of the new year holds more of the same that they got from the last half of 2001. But they also felt that by the time second quarter ends, activity will pick up.
“Most people predict that it will be next summer before things really start to take up again,” said MEDC CEO and President Doug Rothwell.
“Although there is a mixed opinion of what I hear how strong that up-tick will be. Some say it will be slow, while others say it will shoot up real fast,” he added.
Rothwell said those who believe that the economy will rise quickly are counting on the short-term interest rate cuts made by the Federal Reserve to reach a full impact this summer. They also felt that consumers who cut their spending will be back in the stores by then.
But the other side of the consumer story is some believe the zero-percent financing offered on new cars for this past quarter will keep spending down in the new year. Rothwell, however, didn’t agree with that assessment.
“I think the fact is people are buying more cars more frequently than they ever did before,” he said.
Still, Rothwell felt a slowdown would continue for the first six months of 2002, with the unemployment figure possibly rising to 6 percent statewide. He expects more layoffs will come from the automobile sector, mostly from the Ford Motor Co., while the other sectors should remain stable, where these industries are today. Then he expects a recovery will get underway in mid-summer.
And Rothwell believes that the state’s business community will continue to diversify. Just one reason for that belief has come from Pfizer Inc.
The pharmaceutical company recently announced a $600 million expansion of its laboratories in Ann Arbor, which will create nearly 1,000 new jobs in the life sciences sector. The project was seen as being so big that the city of Ann Arbor awarded Pfizer its first tax abatement in two decades, and that came on top of the incentives the state committed.
“I think for life sciences, it’s terrific news. We’re working with Pharmacia on some stuff that they might be able to do in Kalamazoo. We’ve got Perrigo happening.
“And also what I don’t think gets much attention is we’ve got some small life sciences firms that are growing around the state,” said Rothwell, who added that Pfizer never backed off its expansion plans when the economy soured.
The state is ranked tenth in the nation for the number of employees in the life sciences sector, and Rothwell couldn’t see any reason why Michigan shouldn’t climb five more spots on that ladder over the next decade. He said as the population ages, drugs will have an even larger role in society and firms such as Pfizer, Pharmacia and Perrigo should make a strong impact in that business.
The MEDC made its 30,000th retention visit in November. As part of the nation’s largest business outreach program, the agency’s 25 account managers pay 4,500 visits each year to firms with over 100 employees and to the fastest growing companies in the state.
“You’ve got to get out there and meet the customer face-to-face,” said Rothwell of why the MEDC makes the visits. “It’s like any good sales work; you can’t sit in your office and put out press releases, and hope people are going to feel good about being here.”