CANR RESPONSE TO NOVEL CORONAVIRUS

State of Michigan

Michigan 2020 Economic Outlook

All economic activity is local, and what is happening nationally may not always translate to what is happening locally. Because Michigan trades with the rest of the U.S. some semblance of association exists. Like the nation, we do not expect Michigan’s economy to turn in 2020, but due to dependence on manufacturing, we expect Michigan to have a rather slower 2020.

Expect Michigan economic growth, measured as state-level gross domestic product (gross state product) to trail the nation at 2.3 percent growth in 2020. This follows projected growth of 2.9 percent in 2019. In 2015, Michigan’s gross state project reached 5.5 percent and has since remained around 3.8 percent. Despite projected economic growth, we anticipate state employment growth to remain flat to negative in 2020. We expect 2019 to close out with 26 thousand new jobs, which is about half of the gains in 2018. In 2020, we’re projecting a loss of 3 thousand jobs, mostly tied to goods producing sectors like manufacturing. Both durable and non-durable goods manufacturing is expected to exhibit weakness in 2020, with expected losses of 22 thousand jobs. Most of those losses are tied to transportation manufacturing-linked sectors. Job gains in professional and businesses services and education and health services are expected to offset most of these manufacturing job losses, as other services sectors remain largely flat. Expect government jobs to also grow at a moderate pace. The jobs shuffle will add to unemployment projections, raising Michigan’s overall unemployment rate to around 4.5 percent, up from 4.1 percent in 2018.

Michigan’s wage and salary growth is not expected to keep pace with the nation, as we anticipate less resistance in local labor markets. With that, total wage and salaries growth should be up about 2.3 percent at the close of 2019 and up by 1.6 percent in 2020. Total personal income, by which wage and salaries is only a part of, is projected to be up by 2.3 percent in 2020, or just under the rate of inflation.

 

Updated December 6, 2019