Trends in the Michigan Economy:Presentation to the

Michigan Climate Action Committee

Steven R. Miller

October 30, 2009

Michigan Employment Growth by Industry March 2008 to March 2009

Michigan Rate of Employment ChangeMarch 2009/March 2008

1.5-1.0

-3.3-3.7-3.8

-6.0-6.4-6.6-6.9

-10.3-12.4

-16.3

-20.0 -15.0 -10.0 -5.0 0.0 5.0

Education & Health ServicesGovernment

Other ServicesLeisure & Hospitality

MiningFinancial Activities

TotalTrade Transportation & Utilities

InformationConstruction

Professional & Business ServicesManufacturing

Percent Change

Source: BLS, CES

Michigan Employment is Deepening in Rural Counties

Percent of State and Federal Non-Ag Employment in Non-Metropolitan Counties

0

5

10

15

20

25

1969 1974 1979 1984 1989 1994 1999 2004

Year

Per

cen

t

U.S.Michigan

Employment in Selected Sectors in Michigan: 1990, 2000,2008

0 200 400 600 800 1,000 1,200

Farm

Durable Goods MFG

Ndurable Goods MFG

Trade, Transport, Utilities

Info, Finance, Real Est.

Prof. & Bus. Svcs.

Ed. & Health Svcs.

Leisure & Hosp.

Gov.

1990

2000

2008

Michigan’s Employment Distribution Hardly Resembles the Nation

Employment in Selected Sectors in U.S: 1990, 2000,2008

0 5,000 10,000 15,000 20,000 25,000 30,000 35,000

Farm

Durable Goods MFG

Ndurable Goods MFG

Trade, Transport, Utilities

Info, Finance, Real Est.

Prof. & Bus. Svcs.

Ed. & Health Svcs.

Leisure & Hosp.

Gov.

1990

2000

2008

Source: BEA: REIS

Percent of Total Employment Engaged in Manufacturing, 2008

Percent of Employment in Manufacturing

1 - 6

7 - 10

11 - 15

16 - 20

21 - 31

State: 12

Source: BEA, REIS

We are Not Likely to See Michigan’s Employment Reach the 5 Million Mark in the

Foreseeable FutureU.S. and Michigan Employment Trends, 1976-2009

0

1,000

2,000

3,000

4,000

5,000

6,000

1976 1981 1986 1991 1996 2001 2006

Year

Mic

hig

an E

mpl

oym

ent

(000

's)

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

U.S

. Em

ploy

men

t (0

00's

)

Michigan

United States

Source: BLS, Unemployment Statistics

Source: BLS, Unemployment Statistics

Unemployment Rates in Michigan and the United States, 1976-2008

0

2

4

6

8

10

12

14

16

18

1976 1981 1986 1991 1996 2001 2006

Year

Per

cen

t

Michigan

United States

Michigan’s Never Experienced a Recovery from the 2001 Recession

Unemployment Rates Vary Across Counties

Legend

2008 Average Unemployment Rate

5.9 - 7.2

7.2 - 9.2

9.2 - 10.6

10.6 - 12.1

12.1 - 14.4

Source: BLS, Local Area Unemployment Statistics

Michigan’s Relative Income to the U.S. Declines by 0.3% per Year

Michigan Per-Capita Personal Income as a Percent of U.S., 1969-2007

y = -0.0029x + 1.0584

0.80

0.85

0.90

0.95

1.00

1.05

1.10

1.15

1.20

1969 1974 1979 1984 1989 1994 1999 2004

Year

Per

cent

Source: BEA, Annual Personal Income

Michigan is Relatively Manufacturing Intensive

Percent of W&S Employment in Manufacturing

0

5

10

15

20

25

30

35

40

1969 1974 1979 1984 1989 1994 1999 2004

Year

Per

cen

t

U.S.

Michigan

Michigan’s Manufacturing Employment Moves in Lockstep With Motor Vehicle

Manufacturing EmploymentManufacturing and Motor Vehicles as a Percent of

Gross State Product for Michigan, 1963-2007

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

1963 1968 1973 1978 1983 1988 1993 1998 2003

Year

Per

cen

t

Manufacturing

Motor Vehicle MFG

Source: BEA, REIS

Despite Shedding 250 Thousand Manufacturing Jobs, Michigan is Relatively

Dependent on Manufacturing

Source: BEA, REIS

Manufacturing as a Percent of Domestic Product for Michigan and the United States 1963-2007

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

1963 1968 1973 1978 1983 1988 1993 1998 2003

Year

Per

cen

t

United States

Michigan

In Rural Counties, Michigan’s Manufacturing Employment Resembles

the U.S.Percent of Local Employment in Manufacturing for

Rural Counties, 1969-2007

0%

5%

10%

15%

20%

25%

1969 1973 1977 1981 1985 1989 1993 1997 2001 2005

Year

Per

cen

t

U.S. Non-Metro

MI Non-Metro

Manufacturing Employment is Shifting to Rural Counties

Percent of State or Federal Manufacturing Employment in Rural Counties

0%

5%

10%

15%

20%

25%

1969 1973 1977 1981 1985 1989 1993 1997 2001 2005

Year

Per

cen

t

U.S. Non-Metro

MI Non-Metro

Michigan Electricity Prices are Consistent with U.S. Prices

Michigan and United States Electricity Rates by Use, 1990-2007

$0

$2

$4

$6

$8

$10

$12

1990 1993 1996 1999 2002 2005

Year

Ave

rage

Ret

ail P

rice

s (c

ents

/KW

h)

United States ResidentialMichigan ResidentialUnited States CommercialMichigan CommercialUnited States IndustrialMichigan Industrial

Source: U.S. Department of Energy, EIA

Michigan Industrial Use Reflects Accelerated Declines in MFG Activity

Relative to the Nation

Source: U.S. Department of Energy, EIA

Growth in Retail Sales of Electricity in Michigan and United States by Use, 1990-2007

-20

0

20

40

60

80

100

1990 1992 1994 1996 1998 2000 2002 2004 2006

Year

Per

cen

t G

row

th f

rom

199

0

United States ResidentialUnited States CommercialUnited States IndustrialMichigan ResidentialMichigan CommercialMichigan Industrial

Michigan is Missing Population Growth in Key Age Groups

Michigan and United States Population Growth for Selected Age Groups, 2002-2008

-15%-10%

-5%0%5%

10%15%20%25%30%

Under 5Years

5 to 13Years

14 to 17Years

18 to 24Years

16Years +

18Years +

15 to 44Years

65Years +

85Years +

Age Group

Per

cen

t C

han

ge

Michigan

United States

Source: Census

Not All Counties Are Experiencing Population Declines

Legend

-12.78 - -7.64

-7.63 - -2.34

-2.33 - 1.33

1.34 - 5.41

5.42 - 16.33

Percent Change,2000-2008

Source: Census

Percent Change,2005-2008

-6.38 - -4.92

-4.91 - -2.15

-2.14 - -0.85

-0.84 - 0.71

0.72 - 3.10

Legend

Not All Counties Are Experiencing Population Declines

Source: Census

Michigan’s Educational Attainment Lags the Nation

Percentage of Population Aged 25 and Over With a Bachelor's Degree in Michigan and the United States, 1977-2007

0

5

10

15

20

25

30

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

Year

Per

cen

t

United States

Michigan

Source: Census

What Does this Mean for the Michigan Economy?

• Michigan will not likely share in the same recovery of the nation.

• Michigan’s population education attainment hinders progress in the Global Economy.

• The continued decline in the dollar may temporarily prop Michigan’s manufacturing sector, but the long-term U.S. and Michigan trend is away from manufacturing.

• The auto sector is likely to experience further declines or anemic growth in the foreseeable future.

• PowerPoint presentation can be downloaded at,www.cea.msu.edu

• For further information, contactSteven R. Miller 88 Agriculture Hall Michigan State University East Lansing, MI 48824 (517) 355-2153 mill1707@msu.edu

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