Monday, May 3, 2010

At least one economist sees growth and reasons for hope that the worst may be over.
That statement shows where we’ve been.

This state last enjoyed positive economic growth in 2005.

Then came the Great Recession.

But Comerica Bank’s chief economist boldly predicted to the Detroit Free Press for an April 27 report that Michigan will return to economic growth this year.

Manufacturing, one of Michigan’s key sectors, is leading the national economic recovery, which usually works in our favor for a more rapid rebound than the rest of the United States when exports rise and spending on business equipment and household appliances surge.

Niles merits mention for already being in the front four of recovery mode, according to a company which tracks 15 metropolitan areas.

In the report released last Monday, Dana Johnson, a prominent state economic expert, forecast that the production of goods and services in Michigan will grow by 3 percent or more this year, leading to a modest jobs increase.

“That’s a wonderful change from the last five or six years,” Johnson said. “Michigan is going to perform more like the rest of the country.”

Another reason for Johnson’s optimism is that Detroit carmakers stabilized their market share and are expected to see a double-digit boost in domestic sales this year.

Auto manufacturing will no longer be the engine that powers growth in a more diversified state. Because of Motor City restructuring, just 3 percent of state jobs reside in making cars and auto parts – compared to 7 percent a decade ago.

Johnson also believes the state jobless rate will dip below 12.5 percent by the end of 2010.

It stubbornly stayed at 14.1 percent in March – highest in the nation. Michigan shed almost 1 million jobs since 2000.

Of course, not everyone agrees with Johnson, but maybe his rosier view will prove contagious.

More than a week ahead of Johnson, independent Moody’s Economy.com published data showing Michigan’s doldrums moderating.

Niles, along with Ann Arbor, Lansing and Saginaw, were the four areas already deemed to be in recovery mode.

George Fulton, a University of Michigan economist, more cautiously predicts there won’t be any job growth until 2011.

In fact, he guesses the state will lose another 39,300 jobs this year. But wait, there’s more.

Michigan retailers’ sales and forecasts remained comparatively strong in March, far ahead of last winter’s weak numbers though off from February, according to the Michigan Retail Index survey, a joint project of Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago.

The sales Index topped 50 (on a scale of 0-100) for the second month in a row – the first time that’s happened since July and August of 2007 – indicating continued positive activity throughout the retail industry.

“Consumers continued buying with new energy and optimism,” said MRA President and CEO James P. Hallan. “There was some fall off from February as the unemployment rate remained at 14.1 percent, but we continue to see significant progress from a year ago.”

The Michigan Retail Index survey for March found that 48 percent of retailers increased sales over the same month last year, while 33 percent recorded declines and 19 percent saw no change.

The results create a seasonally adjusted performance index of 55.4, down from 56.7 in February.

A year ago, the index was 39.4 in March.

Index values above 50 generally indicate an increase in positive activity, while values below 50 indicate a decrease.

Looking ahead, 57 percent of retailers expect sales during April-June to improve over the same period last year, while 20 percent project a decrease and 23 percent no change.

That puts the seasonally adjusted outlook index at 62.4, down from 70.7 in February.
A year ago, the index was 47.8 in March.

More retailers reported increased sales than reported decreases in every region of the state except southeast Michigan.