The chief economist at Comerica bank and one of the state's foremost prognosticators sees signs that Michigan is near the front of the U.S. parade out of recession.
In his latest Michigan Economic Brief, Dana Johnson forecast that the production of goods and services in Michigan will grow by 3% or more this year, leading to a modest increase in jobs. The last time the state enjoyed positive economic growth was in 2005.
"That's a wonderful change from the last five or six years," Johnson wrote. "Michigan is going to perform more like the rest of the country."
One of the brightest spots at the bottom of Johnson's tea cup is the indication that Detroit's automakers have stabilized their market share and are expected to reap a double-digit increase in domestic sales this year. Ford recently posted a $2.1 billion quarterly profit, and Chrysler repaid its government loans ahead of schedule.
On the jobs front, Johnson believes the state's unemployment rate will drop below 12.5% by year's end. Michigan's unemployment rate is still worst in the nation, but in recent months has stabilized at 14.1% He predicts the state will return to positive job growth this year.
"Looking ahead, Michigan should do considerably better for a while," Johnson wrote in his Brief. "The economic recovery will work in Michigan's favor, as it has in the past. And the adverse structural trends are not likely to be as bad if the auto manufacturing sector is becoming more competitive."
Johnson noted that Michigan's economy normally recovers more rapidly than the national economy does in the aftermath of a recession. The trend is happening again this year, with Michigan getting a boost from the turnaround in the auto industry. Johnson noted that manufacturing, one of Michigan's largest sectors, is leading the national economic recovery, thanks to rising exports and increased spending on business equipment and household durable goods like appliances.
Importantly, however, Johnson notes that auto industry is no longer in the driver's seat of Michigan's economic growth. Due to the auto companies' restructuring, only 3% of the jobs in the state are in auto and auto parts manufacturing, compared with 7% in 2000.
The good news: "New sources of economic leadership will be able to emerge so long as the car companies stop creating the huge headwinds that impeded the state's economy over the past decade," Johnson predicted.
In his latest Michigan Economic Brief, Dana Johnson forecast that the production of goods and services in Michigan will grow by 3% or more this year, leading to a modest increase in jobs. The last time the state enjoyed positive economic growth was in 2005.
"That's a wonderful change from the last five or six years," Johnson wrote. "Michigan is going to perform more like the rest of the country."
One of the brightest spots at the bottom of Johnson's tea cup is the indication that Detroit's automakers have stabilized their market share and are expected to reap a double-digit increase in domestic sales this year. Ford recently posted a $2.1 billion quarterly profit, and Chrysler repaid its government loans ahead of schedule.
On the jobs front, Johnson believes the state's unemployment rate will drop below 12.5% by year's end. Michigan's unemployment rate is still worst in the nation, but in recent months has stabilized at 14.1% He predicts the state will return to positive job growth this year.
"Looking ahead, Michigan should do considerably better for a while," Johnson wrote in his Brief. "The economic recovery will work in Michigan's favor, as it has in the past. And the adverse structural trends are not likely to be as bad if the auto manufacturing sector is becoming more competitive."
Johnson noted that Michigan's economy normally recovers more rapidly than the national economy does in the aftermath of a recession. The trend is happening again this year, with Michigan getting a boost from the turnaround in the auto industry. Johnson noted that manufacturing, one of Michigan's largest sectors, is leading the national economic recovery, thanks to rising exports and increased spending on business equipment and household durable goods like appliances.
Importantly, however, Johnson notes that auto industry is no longer in the driver's seat of Michigan's economic growth. Due to the auto companies' restructuring, only 3% of the jobs in the state are in auto and auto parts manufacturing, compared with 7% in 2000.
The good news: "New sources of economic leadership will be able to emerge so long as the car companies stop creating the huge headwinds that impeded the state's economy over the past decade," Johnson predicted.
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