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Study: Detroit Regional Economic Growth Slowing, Lagging Behind Nation/Peers

December 5, 2019

Crain’s Detroit Business

Dustin Walsh

Despite progress in recent years, Southeast Michigan continues to lag behind the nation in its economy, education, employment, population and other key indicators, according to the annual State of the Region report released Thursday by the Detroit Regional Chamber.

“Our regional economy continues to grow … but in many areas we lag our peers, we lag the nation,” Sandy Baruah, the chamber’s president and CEO, said in a call with reporters.

Key findings include:

  • The labor force participation rate of the Detroit MSA improved 0.3 percent in 2018, compared to 0.1 percent growth in the U.S. But Detroit remains the lowest among major metropolitans at 62.6 percent and below the national average of 63.3 percent.
  • Private sector job growth continues to lag, with the Detroit region growing 1.4 percent in 2018, below the national average of 1.9 percent. Between 2014-2018, private sector job growth in the region was 7.7 percent, but still below the national growth rate of 8.2 percent.
  • Per capita income growth for the region slowed last year at only 2.5 percent, versus the national average of 4.4 percent. However, the region outperformed the national growth rate of 17.1 percent between 2014-2018 with a growth rate of 18.2 percent.
  • Residential construction permits plummeted in 2018 by 29 percent in the Detroit region, compared to 3.6 percent growth nationally. Median home values continued to grow last year at 5.1 percent, but below the national average of 5.6 percent. Since 2014, however, the region outpaced the national average and peer cities including Cleveland, Chicago and Boston.
  • Population growth also slowed, down to 0.1 percent in 2018 compared to 0.6 percent nationally. However, millennial generation population growth exceeded the nation last year at 2.5 percent versus 0.8 percent.
  • The region continues to lag behind peer cities in educational attainment, with an annual increase in those with undergraduate and graduate degrees by 1.9 percent in 2018 versus 2.7 percent nationally. Only 40.7 percent of Michigan adults hold a college degree, below the national average of 41.2 percent and below cities like Cleveland, Chicago, St. Louis and Atlanta.
  • Despite increasing focus education and employment in science, technology, engineering and math, the Detroit region’s job growth in STEM is behind the nation at 1.4 percent in 2018 compared to 2.1 percent nationally. However, it’s outpaced the nation since 2014 with a growth rate of 10.6 versus 9.9 percent.

The state and region is also being negatively impacted by national issues, such as the White House’s various trade disputes, Baruah said.

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