Jay Baron,center, president and CEO Center for Automotive Research, speaks during the Detroit Economic Club as fellow panelist Charles Ballard, left, professor of economics at Michigan State University, and Doug Rothwell, president and CEO, Business Leaders of Michigan, spoke of Michigan's economic outlook at the MotorCity Casino. (Max Ortiz / The Detroit News)
A new survey shows that Michigan business executives and residents think the state economy has improved greatly since the depths of the Great Recession, but that further improvement will mean addressing the gnarly ongoing issues that previously trapped Michigan in a “one-state recession.”
Results from the Michigan Economic Outlook survey released at Wednesday’s meeting of the Economic Club of Detroit show more respondents in business, nonprofits and the general public would recommend the state as a place to do business than did so last year. But the same people reported feeling less satisfaction with the state overall.
On eight questions, scores from business leaders dropped significantly between the report in 2013 and 2014, said Margaret Baker of Ann Arbor’s Baker Strategy Group, which conducted the survey. That included ratings on the state’s quality of life, educational system, fiscal stability and promoting a forward-looking culture.
Overall, leaders of Michigan’s key manufacturing industries who rated Michigan as a good place to do business rose from an index of 25 in 2009 to 65 this year, Baker said, adding that, “65 is still low.”
“The work that we need to do now is relatively different than what we need to do a couple of years ago,” said Doug Rothwell, president and CEO of Business Leaders for Michigan. “The reason why it’s hard now is this is a harder agenda.”
While there was consensus among many factions in the state to balance the budget and address the state’s convoluted business tax structure, no such consensus exists around solving the problems of paying for higher education and rebuilding the state’s roads, Rothwell said.
Another issue is the number of municipalities struggling to cope with a shrunken tax base after property values plummeted, noted Charles Ballard, professor of economics at Michigan State University. They include Detroit and other cities operating under a state-ordered emergency financial manager.
“Even if you got some growth in some areas, people want to come to some place not just for a job,” Ballard said, “but where there are parks and lights and police and fire protection.”
Ballard also stressed the damage being done to the state economy by growing income inequality, which has left the state’s median-income earners making less after inflation than they made in the 1970s.
One area of opportunity is the growing influence of technology in the automotive sector, said Jay Baron, president and CEO of the Center for Automotive Research. The auto industry is evolving toward higher technology cars, an area where Michigan will need to lead, not follow, including developing a more highly trained, educated and skilled work force.
“The key is people,” Baron said.