2026 State of the Region | Confronting a Stark Reality: The House Is on Fire

• The Detroit Region and Michigan will continue to decline in critical national rankings until public officials develop long-term bipartisan solutions. Business leaders must speak up and contact their representatives.
• Despite falling rankings, Detroit’s resurgence continues, and the report illustrates the Region’s emerging strength in venture capital investments and entrepreneurship, as well as commercial vacancy rates lower than the national average.
• The house may be on fire. But the foundation is still there if Michigan is willing to confront the truth about where it stands and activate solutions to get the state back on track.

Michigan’s house continues to be on fire, as indicated in the Detroit Regional Chamber’s annual State of the Region report. The latest data, unveiled at an event on March 25, showed how Michigan is severely underperforming among peers in core economic measures, from per capita income to educational attainment and population growth, and how residents are unaware of those near-bottom rankings.

“When we talk about the ‘House Being on Fire,’ we’re trying to give a very clear message to leaders like you, the media, and frankly, the citizens at large, that if we don’t know where we really stand on some key metrics, we’re really not going to know how to get where we want to go,” Sandy K. Baruah, the Chamber’s President and Chief Executive Officer, explained during his keynote address at the 12th annual State of the Region event.

Watch the presentation recording below.

While the data isn’t only bad news, the state’s and Detroit Region’s economic standing among peers paints a sobering picture that demands attention.

Since 2000, the state has fallen from 16th to 44th in fourth-grade reading and from 18th to 40th in per capita income, its lowest ranking ever. Despite recent good news about Michigan’s population increasing, Michigan’s population growth over the past 20 or so years is second-to-last nationally. No state has fallen as hard and as fast in these metrics as Michigan.

The picture isn’t much better on a regional scale, as the Detroit Region ranks in the bottom quarter among 20 peer regions in areas like job growth, educational attainment, population growth, and GDP per capita. Worse yet, it ranks dead last among these same peers in per capita income.

Further, Baruah said national trade and industrial policy have hit Michigan and the Region particularly hard. While this past year’s unstable tariff policies were supposed to help American goods and trade, they appear to have had the opposite effect. U.S. exports are down 12%, and total trade activity has fallen $17 billion year over year. In the automotive and mobility industry, automakers have taken $35 billion in losses due to tariffs and $50 billion in write-offs tied to electric vehicle policy shifts.

“So we’re approaching $100 billion in the auto industry alone that has been shifted from productive capital to nonproductive capital in the industry that we call signature,” he said.

Worker and consumer confidence are deteriorating. Only 28% of workers say it is a good time to find a job, down from 50% in 2022. Consumer sentiment has hit a 65-year series low, driven by affordability pressures. Overall prices are up 24% over the past five years compared to only 7% in the previous five-year range (2014-2019). Coffee prices are up 124%, vehicle prices are up about 33%, auto insurance is up more than 50%, and vehicle maintenance is up 35–40%. Even executives are feeling economic strain, with the sharpest drop in CEO sentiment in 20 years coming into 2026.

Some indicators shared in the State of the Region report suggest some stability. Michigan’s job growth grew 1%, and its unemployment rate remains below 5%, which is generally considered solid, yet it still trails key competitor regions such as Austin, Texas, and Nashville, Tennessee.

“Economists, even today, generally agree that an unemployment rate under 5% is solid, and we are under 5%,” Baruah said. “But again, when you look at where Indianapolis is, where Austin is, Nashville, [and] other places, we’re certainly shallow against some of our key competition spread out across the country.

Baruah ended the analysis on a higher note, showcasing the powerful advantages Michigan and the Detroit Region have that he said many regions would envy. The state is a national leader in innovation, ranking in the top five for business‑funded R&D, and venture capital investment has surged. Michigan now ranks 12th in the nation in deal value growth, a dramatic rise from not being in the top 50% a decade ago.

Further, new business startups in the Region and state are “on fire” in a good way, according to Baruah, exceeding the national rate. Baruah said this is important because new businesses are a sign of strong economic growth. Nationally, Black women in particular are helping drive this growth, forming businesses at a rate 2.5x that of all women-owned businesses in the U.S., strengthening equity and long-term economic growth.

“… our momentum continues in so many different ways, big and small. We continue to make news, frankly, in all the right ways,” he said. “So we have lots of good news to celebrate, but we also have to look very clearly at what our challenges are, and we need to understand them and clearly address them, because if we don’t understand them, our elected leaders don’t have the incentive to be bold in that way.”

The Chamber recognizes these strengths and continues to build momentum in its own ways to elevate Michigan and the Detroit Region to their potential. This includes projects like working with the University of Michigan and other partners to create the Ann Arbor-Detroit Innovation Corridor.

“What we’re seeing here is that we have all the right puzzle pieces. We just need some elbow grease that kind of puts these pieces together, so we can really capitalize on the innovation assets that we have,” Baruah said. “And I’m really excited about this project. It’s not going to happen tomorrow, but it’s a great project that we think is going to pay real dividends as we go on.”