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State of the Region Report: Metro Detroit Economic Growth Returning to Normal Levels as Resurgence Slows

DETROIT, December 9, 2015: Today, the Detroit Regional Chamber released its second annual State of the Region report comparing metro Detroit’s economic performance to its peer regions. The report shows that while Southeast Michigan’s economy is stronger with growth rates that led the nation following the Great Recession, they have begun to return to normal levels and are comparable with current national averages.

“The Detroit region has roared back since 2009, leading our peers and outpacing the nation in so many key economic categories, from GDP to income and job growth,” said Chamber President and CEO Sandy Baruah. “However, that momentum is starting to slow and we need to prepare as a region for what comes next. There’s a lot to celebrate, but given the region’s long-term deficit of economic growth, normal levels are not enough.”

The Chamber released the report to its membership at its annual meeting at The Westin Book Cadillac in Detroit. The report includes data on key economic indicators for the 11-county, 7,061-square mile region that is home to 5.4 million people and more than 300,000 businesses, including 13 Fortune 500 companies. Highlights of the report include:

  • Between 2009 and 2014, Detroit’s gross domestic product growth outpaced the national average by 7 percentage points.
  • Private sector job growth outpaced the national average by 4 percentage points since 2009.
  • In 2013, the Detroit MSA was awarded 3,000 utility patents, the most ever in a single year for the region.
  • The region’s industrial vacancy rates have declined by 9 percentage points since 2010 and are now on par with the national average.
  • Detroit led its peer regions in median home value growth at 2%, between 2013 and 2014.
  • In 2014, 109 foreign-held companies announced investment of nearly $3.9 billion in Michigan facilities, creating 15,000 jobs.
  • Detroit leads its peer regions in STEM occupation growth at 8% since 2009.

The State of the Region report is being shared with municipalities and counties, area chambers of commerce, and other like-minded organizations to better inform regional economic development efforts.

“The Detroit region has a tremendous economic story to tell,” Baruah said. “But as global competition intensifies, it takes everyone in the region pulling together and harnessing the potential of our collective assets for us to thrive. It’s about adopting a mindset that a win for anyone in the region is a win for the entire region.”

Long-term Challenges

While the region continues to grow, it faces new and systematic challenges based on data in the report that are cause for concern. Given the region’s overall level of economic prosperity compared to peers, the region must sustain better than average gains over the long term. For instance:

  • Chicago surpassed the Detroit region as the No. 1 exporter to Canada in 2014. Economic growth, prosperity and diversification are tied to export levels.
  • Educational Attainment. The State of the Region shows a significant deficit in education attainment as the percentage of population 25 years and older with a bachelor’s degree or higher continues to lag behind all peer regions.
  • Per Capita Income. Related to challenges in educational attainment is the lag in per capita income. While Detroit has been a leader in income growth since 2009, year over year data shows a slowing of income growth compared to peers and the national rate. The region ranked 9th out of 10 peer regions in 2014.

A New Strategy Is Needed

In conjunction with the report, the Chamber announced a new strategy called Forward Detroit, which is designed to sustain the region as one of the fastest-growing in the United States. The initiative aims to serve as Michigan’s leader in shaping and executing the Detroit region’s collaborative pro-growth policies and programs by building on the Chamber’s economic development and advocacy expertise.

“Our peer regions far outspend us in economic development and business attraction efforts, and it’s not even close,” Baruah said. “We need to continue to excel economically to achieve the prosperity of many of our peer regions. The Chamber is uniquely positioned as the only entity with the proven programs and advocacy resources to lead the type of region-wide strategy Detroit needs to compete globally.”

Focusing on five pillars – Business, Talent, People, Community, and Global Connectivity – the Chamber will seek funding from the business and philanthropic communities for Forward Detroit to drive economic development and help the region achieve long-term prosperity. The initiative’s goal is to raise $20 million by the conclusion of 2021.

“The domestic automotive industry is surging and the Detroit bankruptcy is in the rearview mirror. Capitalizing on this unique moment in time and sustaining our momentum requires a regionally focused strategy that transcends politics,” Baruah said. “Forward Detroit is critical as the public sector is cutting funding for many of the priorities we need to grow the economy. Forward Detroit is a game-changer that will allow us to compete globally for talent, investment and jobs.”

To download the full State of the Region, visit detroitchamber.com/SOR.

About the Detroit Regional Chamber

Serving the business community for more than 100 years, the Detroit Regional Chamber is one of the oldest, largest and most respected chambers of commerce in the country. The Chamber’s mission of powering the economy for Southeast Michigan is carried out through economic development, education reform, regional collaboration and providing valuable benefits to members. For more information, please visit detroitchamber.com.

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