UM Releases Updated Economic Outlook

Substantial economic disruption has occurred since the University of Michigan’s RSQE released economic outlooks for the U.S. and Michigan economies in February 2020. Today, they released an updated set of interim forecasts has been released, which includes two scenarios – a short-lived contraction in economic activity or an “effective mitigation scenario” and a “prolonged fallout scenario”.  The analysis is based on the Congressional Budget Office’s (CBO’s) 2005 study “A Potential Influenza Pandemic: Possible Macroeconomic Effects and Policy Issues.”

View the full analysis or read a summary below:

RSQE expects an official recession to be declared in both scenarios considered. It remains possible for events to unfold in a more positive direction than the two scenarios.

GDP

On an annual basis, the United States real GDP growth in 2020 registers approximately  0.5  percent in the effective mitigation scenario and negative  1.8  percent in the prolonged fallout scenario, or roughly four percentage points lower than in the February outlook.  The level of real  GDP  in the effective mitigation scenario catches up to the previous forecast level by mid-2021, but in the prolonged fallout scenario, it runs substantially below the previous forecast level throughout the forecast horizon.

Employment

In the effective mitigation scenario, Michigan’s payroll employment count declines by approximately 155,000 jobs from the first to third quarters of 2020. In the prolonged fallout scenario, the decline is 400,000 jobs. Although in the former scenario, the state’s job count returns to its forecast path from the previous forecast by early 2022, it remains well below the previous expectations in the latter scenario.

Unemployment Rate

In the effective mitigation scenario, Michigan’s unemployment rate rises from 4.1 percent in 2019 to 5.8 percent in 2020, before declining back to  4.5  percent in  2021.  In the prolonged fallout scenario,  the state’s unemployment rate jumps to 8.1 percent in 2020 and 8.8 percent in 2021 before beginning to decline; it reaches a peak quarterly rate of 10.0 percent in the third quarter of 2020.

Key Points

  • There is limited economic information available, and the situation is evolving quickly.
  • Protecting people’s lives at the expense of short-term economic pain is justified on public health grounds and by long-term economic logic.
  • It is imperative for the federal and state governments to mitigate the pandemic’s economic damage to vulnerable people’s livelihoods.

View the full analysis.

ArtServe Michigan’s New Creative State Michigan Report Reveals Increased Contributions to Michigan Economy

WIXOM, Mich. (January 28, 2013) – One year following the launch of its nationally recognized report in 2012, ArtServe Michigan – the state’s leading statewide arts and cultural advocacy organization – today released its Creative State Michigan report focused on Fiscal Year 2010. The report details economic and social data from 346 nonprofit arts and cultural organizations, representing an estimated 17 percent of the more than 2,000 cultural groups operating statewide. The data reveals that these organizations contributed more than one-half billion dollars in expenditures alone to the Michigan economy in 2010. Learn more at www.CreativeStateMI.org.

Among its most compelling data, the report affirms the creative economy as a significant growth sector and strategic opportunity for Michigan’s economy. From 2006 to 2011, the number of arts-related jobs increased by 15 percent to 85,656 jobs in Michigan, while arts-related businesses increased by 65 percent to 28,072. From 2010-2011 alone, jobs increased by 11 percent, while businesses increased by 16 percent. Moreover, of the $553.4 million in annual expenditures by the nonprofit creative community in 2010, nearly $194 million supported salaries for 22,335 jobs.

Nationally, arts and cultural organizations spent $61.1 billion in 2010 and leveraged an additional $74.1 billion in event-related spending by arts audiences, according to Americans for the Arts. This combined $135.2 billion in economic activity supported 4.1 million jobs and generated $22.3 billion in total government revenue.

Michigan’s arts and cultural destinations continue to demonstrate their essential value to the state’s tourism industry, generating more than $2 billion in state tourism revenues in fiscal year 2011. That represents 16 percent of the state’s total tourism revenues in that year – more than golf, boating and sailing, hunting and fishing, and hiking and biking combined.

“Every day, Michigan’s arts and cultural organizations and creative industries are making major contributions to our state’s economy – creating jobs, spending in local communities, generating tourism revenues and shaping vibrant cities and towns that attract talent and business investment,” said Jennifer Goulet, president and CEO of ArtServe. “This year’s Creative State Michigan report reinforces the critical role of Michigan’s creative economy in defining new opportunities to position the sector as a strategic economic tool and resource for our state.”

The report also provides indicators for the resources the arts provide for Michigan’s schools and children, as well as residents of all ages. In 2010, more than 2.7 million students benefitted from educational programs and events offered by arts and cultural venues statewide. These same organizations hosted 26,515 youth and school group visits and facilitated 1,135 programs in schools providing valuable educational experiences at a time when many schools have cut funding for arts programs. Michigan’s cultural groups are reaching growing audiences, reporting more than 15.7 million visits in 2010, 54 percent of which were free of charge.

Data sources for the Creative State Michigan report include the Michigan Cultural Data Project (Michigan CDP), Americans for the Arts’ annual Creative Industries Reports, and the Michigan Economic Development Corporation/Pure Michigan. The Michigan CDP data includes FY 2010 data profiles from 346 nonprofit arts and cultural organizations. There are nearly 800 organizations registered in the Michigan CDP today, positioning future reports to demonstrate increasing impacts over time.

Launched May 2010, the Michigan CDP is a powerful online management tool with a robust support network designed to strengthen arts and cultural organizations. It also provides funders with reliable, comparable data to inform grantmaking and helps advocates and researchers better understand and communicate the sector’s impact. A growing national model owned and operated by The Pew Charitable Trusts, the CDP is operating in 12 states and the District of Columbia, with 253 grant programs and close to 14,000 organizations participating across the US.

Twenty Michigan foundations and funders have collaborated to bring the CDP to Michigan and support Creative State Michigan committing to the initiative as an important investment in the growth and sustainability of Michigan’s arts and cultural resources. Melonie Colaianne, president of the MASCO Corporation Foundation, said, “This year’s Creative State Michigan report once again makes a clear and compelling case for the far-reaching contributions of the arts in Michigan – using data from the growing set of cultural organizations participating in the CDP to emphasize the significant ways that arts and culture strengthen the economy and serve our communities. We are looking forward to working with ArtServe to share its findings widely.”

This year Data Driven Detroit once again provided research support for ArtServe Michigan, as an independent examiner of the information. “This effort provides a critical reminder of the importance of the nonprofit sector in Michigan’s economy, supporting previous research from the Michigan Nonprofit Association,” said Director of Data Driven Detroit Kurt Metzger. “By drilling down within the arts and culture sector, the Michigan CDP brings forward a rich new source of detailed data with solid collection methods to deliver a more complete picture of the region’s economic and social activity. We look forward to the continued expansion of CDP contributing organizations, which will serve to broaden and deepen our research in the years to come.”

The Michigan Cultural Data Project is made possible through the leadership and generous support of:
ArtServe Michigan
Barry Community Foundation
Battle Creek Community Foundation
Capital Area Community Foundation
Charles Stewart Mott Foundation
Community Foundation for Southeast Michigan
Council of Michigan Foundations
Erb Family Foundation
Frey Foundation
Grand Rapids Community Foundation
Great Lakes Bay Regional Convention and Visitors Bureau
Hudson-Webber Foundation
Irving S. Gilmore Foundation
The Kresge Foundation
MASCO Corporation Foundation
Michigan Council for the Arts and Cultural Affairs
Michigan Humanities Council
National Endowment for the Arts
Petoskey – Harbor Springs Area Community Foundation
Rotary Charities of Traverse City
Ruth Mott Foundation
The Skillman Foundation
Southfield Community Foundation

ArtServe Michigan is a statewide nonprofit advocacy organization dedicated to cultivating the creative potential of Michigan’s arts and cultural sector and creative industries to enhance the public health and well-being of Michigan, its people and communities. ArtServe advocates for arts, culture, arts education and the power of the creative economy in Michigan; provides leadership and professional development for artists, creative practitioners, and arts and cultural organizations; and connects arts and cultural leaders and supporters through strategic communications. Contact ArtServe Michigan at 248-912-0760 or visit ArtServeMichigan.org.