On a sunny but brisk mid-January day, the local commercial real estate industry, associated professionals and affiliated company representatives gathered to network, usher in the New Year, dine and receive an update on the state of the local, state and national economy.
With the capacity crowd assembled at Dearborn Inns’ banquet center, CORENET President Margaret St. Andre welcomed attendees and thanked all of the sponsors for their support of the event, including BODMAN, CBRE, DMS Moving Systems, TURNER Construction and VHM Enterprises, Inc. Other organizations lending their support included BOMA, CBOR, CCIM, CREW, IFMA, IREM & SMPS.
Having attended several of these economic forums in the past and learning to sit through numerous slides of statistics outlining the depths of Michigan’s’ recession, we all have become numb at absorbing so much bad news in such a short period of time. Thankfully, it appears the conversation on Michigan’s’ economy and our states’ financial fortunes may finally be changing for the better. After almost a decade of recession, staggering unemployment figures, reduced wages and the states’ seemingly irreversible “brain drain”, Jay Wortley, Director at the Office of Revenue and Tax Analysis for the Michigan Treasury Department, stated he had come to help all of us. That comment drew laughter from the crowd.
On a more serious note, Mr. Wortley indicated that Michigan had not only “turned the corner” with its present financial picture, but had in fact taken “two giant steps forward” in reversing the long, negative financial trend of the past. Those comments couldn’t have been more welcomed news to the real estate and business audience. Mr. Wortley went on to describe the good news was verified with reams of new statistics from 2012. Before delving into Michigan’s’ financial news, he took a look at the state of the present US economy.
While real GDP growth increased 2.2 percent in 2012, national unemployment had receded and housing starts and vehicle sales were up, they were still far below pre-recession levels and were forecasted to remain below such levels until at least 2015. The good news nationally was that pent up demand for new vehicles positively impacted the Big 3 sales last year and boosted our local economy as a result. Light vehicle sales rose to 14. 4 Million vehicles last year.
The four biggest issues that could negatively impact our states’ continued financial growth and recovery included: The federal governments’ failure to properly address the federal deficit issues, the European sovereign debt crisis, world economic growth slowdown and another oil crisis. While none of these issues appears to be certain, they create enough uncertainty to have a drag on a more robust and quicker recovery. Notwithstanding these world issues, the news for Michigan was mostly positive.
Michigan is amongst the nations’ top states for growth over the last two years. Our economy’s’ growth was second in the nation last year, only behind North Dakota. The states’ unemployment rate is now below the national average and employment is amongst the top 5 strongest nationally. Michigan’s’ real capital growth rate is the 9th fastest in the country. We have created over 144,000 jobs since the depths of the recession and it’s reported that the quality of the jobs being created is good.
While Michigan has taken great pains to diversify its economy since this last recession, we are still mostly dependent on the state of the auto industry. That’s why its still good news to hear that last year, our state manufactured over 2.25 million vehicles, an increase from 2009 when only 1.19 million vehicles were produced in our state. Mr. Wortley confirmed that most of the job growth in the future will be in the private, non manufacturing side of our economy.
As good as the news is about our states’ economy, we all know there’s much more work to be done in order to regain the prior standard of living all residents have enjoyed in the past. There are still so many issues to deal with that we’re not quite “out of the woods” yet and need to further strengthen the gains accomplished thus far. With strong leadership and continued concerted effort, the future for Michigan’s’ continued financial recovery appears bright.
ROBERT E. MATTLER, Associate Broker, Attorney and LEED AP BD+C, is Director of GREEN Brokerage at Armada Real Estate Services in West Bloomfield, Michigan. Bob speaks, writes and advocates about emerging sustainable real estate issues in Michigan and elsewhere. Bob is a Senior Correspondent for www.greeningdetroit.com . For more information, contact Bob at Armada Real Estate (248) 855-1221; or by e-mail: firstname.lastname@example.org