Economic Development and Government

Survey puts Michigan recovery among best in nation

Business Facilities data indicates Detroit and GR are among the best in export growth.

August 22, 2014
| By Pete Daly |
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The Michigan Economic Development Corp. is touting an extensive survey of economic activity by a nationwide site selection magazine that highlights the strength of the Michigan recovery and boosts prospects for the state’s continued business growth.

Results of the Business Facilities magazine annual report rank Michigan among the top states in employment recovery and in automotive jobs and automotive manufacturing strength since the end of the Great Recession. Further, the report lists Detroit and Grand Rapids among the top regions in the country for economic growth.

MEDC President and CEO Michael Finney said earlier this month the state government’s economic policies have had “a dramatic and measurable impact in growing and attracting businesses.”

“The evidence in the Business Facilities report is verifiable and compelling. It’s nice to see others around the country taking note of our progress,” said Finney.

The MEDC is the state’s marketing arm and lead advocate for business development, talent and jobs, tourism and overall economic growth.

Business Facilities is a media brand specializing in the site selection marketplace; its activities include a bi-monthly magazine, e-mail newsletters, a news portal and its LiveXchange event. Its target audience includes corporate executives and economic development organizations.

According to the 10th annual survey just published, Michigan ranks second behind South Carolina as “employment recovery leaders.” Most economists cite June 2009 as the end of the Great Recession, and since December 2010, Michigan has created 295,500 private sector jobs, led by new jobs in manufacturing and professional and business services, according to Michigan Bureau of Labor Market Information & Strategic Initiatives.

Michigan leads the nation with 120,000 new manufacturing jobs since 2009.

Meanwhile, the MEDC noted the unemployment rate in Michigan has plummeted from a five-year high of 14.2 percent to the current 7.7 percent. The 6.5 drop in percentage points is more than any other state. Michigan’s unemployment rate in June 2009 stood at 7.2 percent.

There are many reasons for Michigan’s economic turnaround, according to Finney: the reinvention and financial success of the automotive industry in Michigan; replacing a convoluted business tax with a streamlined corporate income tax; becoming a right-to-work state; and creating a world-class business-friendly environment by offering performance-based incentives to businesses and attracting foreign investment. The state government also eliminated more than 1,500 burdensome regulations.

The survey notes Michigan is still the No. 1 state for automotive jobs and continues to “rule the roost” as supply chain job leader with 500,000 auto-related jobs, which represents 22 percent of the U.S. auto industry’s workforce.

According to Business Facilities, Michigan ranks sixth in automotive manufacturing strength. Originally a category in the survey that reflected a state-by-state vehicle production scorecard, in recent years it has broadened to consider growth potential, industry trends and commitments by major automakers.

“The rankings are a snapshot, and there are many reasons to believe Michigan is heading to the top spot,” said Nigel Francis, senior vice president of Michigan Automotive Office, which was established last fall to serve as a catalyst for attracting auto-related companies and developing the state’s automotive industry. That industry includes 63 of the top 100 North American auto suppliers, and 375 research-and-development centers, representing three-quarters of all U.S. automotive R&D spending.

From 2009-2013, auto suppliers and automakers have invested heavily in Michigan. In that four-year period, auto suppliers spent $5 billion, while automakers have committed about $14 billion, according to the Center for Automotive Research.

“The presence of major automakers, suppliers and ground-breaking research positions Michigan to be the top U.S. automotive state and the global capital of the auto industry,” said Francis.

Business Facilities ranks the U.S. second to China in the category of Global Automotive Production Leaders.

Detroit is listed as the 10th best metro region for economic growth potential, according to the Business Facilities Metro Rankings. The MEDC said the criteria for the ranking, however, isn’t readily apparent other than the “crucial role exports are playing in the recovery.”

Detroit is listed eighth among Exports Recovery Leaders, and fourth in Exports Growth Leaders. The Grand Rapids metro region ranks ninth.

Beyond the growth in exports from Metro Detroit, the region — especially downtown Detroit — has been mentioned for its leading-edge entrepreneurial activity. In June, Detroit was cited as one of several key U.S. cities cultivating “urban innovation districts” in a white paper report by the Brookings Institution, an independent Washington, D.C.-based think tank.

The Brookings report, according to MEDC’s Finney, confirms the positive impact of ongoing efforts by the state to assist in the development of the Detroit economy through support of a confluence of start-ups, business incubators, mass transit and university-based research that targets the commercial market.

The publishing company’s aim is to inform corporate executives on issues related to choosing the best location for their growing companies. It has been a source of intelligence on corporate expansion and relocation since 1968.

The company’s annual examination of the nation’s economic leaders among locales, states and regions is often among the many considerations by corporations in appraisals of places to grow and locate a business, according to the MEDC. The publication’s 10th annual Rankings Report assesses the “rapidly evolving economic development landscape” and places emphasis on verifiable performance.

The rankings report is published in Business Facilities’ August issue, available online at businessfacilities.com/2014-business-facilities-rankings-report. Other rankings on a city and global basis are at businessfacilities.com/2014-business-facilities-rankings-report-metro-global.

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