Monday, August 09, 2010

Enjoy It While It Lasts: Michigan's Economy Expanding "More Than Twice as Fast as the Rest of the Country"

Portrait of a recovery, but don't break out the champagne just yet. Stats from the Philadelphia Federal Reserve Bank show that Michigan is one of five states "projected to grow strongly" over the next six months, but keep in mind that these figures walk right up to the point where the economy started to slow down again in June, as well as the fact that the Bush Recession hit us harder than any other state and we were climbing out of a deeper hole than everyone else. Reed Construction Data crunched the numbers from the Reserve:

Eleven states have current economic activity indexes of 10% or more below the recent peak level. This is two fewer states than a month ago. The 28% shortfall in Michigan mostly reflects the collapse of the auto industry which began well before the recent recession. Michigan is now expanding at a 9% pace, Ohio 8% and Indiana 6%, more than twice as fast as the rest of the country. The manufacturing boom for exports and machinery that drives this is now subsiding but will remain positive. Manufacturing dependent states will expand very strongly well into next year. But it will take longer than that for the huge space surpluses that built in the last decade to be absorbed so that additional general use space is needed.

The manufacturing boom has pushed the industrial Great Lakes states past New England as the strongest regional economy after many years at the bottom of the list.

Yea for us - but can it be sustained? Unknown at this point. With consumer confidence collapsing again as corporations sit on record profits and refuse to hire, coupled with the insane notion that we should worry about deficits and pull the plug on assistance to citizens and states alike at this crucial juncture, right now it's not looking good.

So enjoy the pretty picture while it lasts, and keep your fingers crossed that the voting public doesn't fall for the Republican theory that "more tax cuts" are the answer to all our problems.