The U.S. Bureau of Economic Analysis released state GDP data for 2012 today. Michigan’s 2012 real GDP growth of 2.2 percent was slightly lower than the U.S. average of 2.5 percent, and Michigan ranked 18th among the 50 states and Washington D.C. Michigan had beaten the U.S. average in both 2010 and 2011, after posting the slowest growth in 2008 and 2009. In 2010, real GDP in Michigan grew 4.9 percent (ranking 7th) compared to U.S. growth of 2.4 percent, while in 2011, Michigan grew 3.5 percent (ranking 5th) compared to U.S. growth of just 1.6 percent.
Michigan’s slow population growth means that Michigan tends to rank better in per capita measures. In terms of real per-capita GDP growth, 2012 was Michigan’s third straight year in the top 10. Michigan real per-capita GDP growth ranked 4th in 2010, 3rd in 2011, and 10th in 2012.
Michigan’s recovery is being driven in part by the recovery in the auto industry. After posting an inflation adjusted 19.8 percent decline in 2008, and a shocking 41.5 percent decline in 2009, Michigan durable goods manufacturing grew 48.7 percent, 15.2 percent, and 8.5 percent in 2010, 2011, and 2012 respectively. The manufacturing recovery still has a long way to go, with the level of durable goods manufacturing in 2012 registering 12.8 percent below the 2007 level in inflation adjusted terms.
For most citizens, state GDP is not the economic statistic that matters most. People care much more about employment growth. Michigan has seen some improving news here as well. After a decade of employment declines, Michigan added 89,000 jobs in 2011. This total is slightly above the average of 88,000 jobs per year that Michigan added during the 1990s. This growth continued in 2012 with Michigan adding an additional 72,000 jobs. The state’s May Consensus forecast calls for continued but slower employment growth with Michigan projected to add 53,000 jobs in 2013 and 48,000 jobs in 2014.
By the end of 2014, Michigan is projected to have added 262,000 jobs or roughly one-third of what was lost in the prior decade. Clearly Michigan has a long way to go, but it does appear that Michigan’s economic fortunes are beginning to change for the better.