Michigan is a major economic power driven by its large population base and global leadership in manufacturing. Michigan is the 10th largest state in the union driven by the Detroit region whose Metropolitan Statistical Area (MSA) ranks as the nation’s 14th largest.
|Population Increase 2020 to 2021||-1.40%||-0.60%||-0.90%||-1.80%||-1.10%||0.10%|
|Median Home Value||$135,600||$156,300||$147,600||$277,600||$57,700||$174,400|
|Bachelor’s Degree Rate||25.50%||32.90%||45.70%||41.70%||16.20%||37.90%|
|Civilian Labor Participation Rate||63.90%||66.80%||64.00%||67.30%||54.30%||70.50%|
|Mean Commute Time||22.3||23.9||23.9||34.4||25.7||22|
|Median Household Income||$45,318||$54,321||$54,306||$65,781||$34,762||$58,575|
Key demographic measures that impact corporate site location decisions include total population and population growth which impact the ability of a region to provide skilled workers—the larger the population pool the more chances for creating a skilled worker. Also, homeownership and median home value illustrate whether workers will be able to afford housing. Labor issues such as the level of higher education degree attainment and how many workers are in the active workforce impact a region’s ability to attract certain types of companies and companies at all if they have no room for growth in the active labor market. Quality of life issues such as commute times to work matter as well and overall wealth measures such as median household income and poverty rate impact company location decisions. As the table above illustrates, the city of Detroit is a large urban market that is not growing, has a homeownership rate aligned with regional competitors, dramatically lower housing costs, bachelor’s degree attainment, labor participation rate, commute times, and household income. The poverty rate in Detroit remains a challenge for the community as well.
Population growth is a critical measure of economic success. Growing population centers attract companies struggling to find skilled labor. A growing population base creates a larger pool of workers for companies. As the table below illustrates, the regions of Detroit, Traverse City, and Grand Rapids all serve as economic drivers with a solid population base. However, Detroit, like its fellow Midwest urban counterparts like Cleveland, has experienced stagnant population growth. However, Grand Rapids, Lansing, and Traverse City illustrate strong growth but not quite at the rates of fast-growing larger markets such as Columbus, Nashville, and Charlotte. However, the rapid growth of these regions can create growing pains for companies seeking low-cost land and construction.
|Population Growth (Metro & Micropolitan Areas)|
|Year||Detroit||Lansing||Traverse City||Grand Rapids||Columbus||Cleveland||Nashville||Charlotte|
Median household income refers to the income level earned by a given household where half of the households in the geographic area of interest earn more and half earn less as measured by the U.S. Census Bureau. Median household income is an important demographic measure as it tells companies the relative wealth of a geographic region but also is an illustration of the general cost of doing business as it is one of the indicators of the potential wages of employees. The chart below compares the median household income for several of Michigan’s major metro regions. Michigan’s median household income growth in the metro regions of Detroit, Grand Rapids, Lansing, and Traverse City is holding its own with competitors outside of the state. This median household income growth illustrates Michigan remains an economic leader even if some parts of the state are not enjoying substantial property tax growth.
Source: U.S. Census Bureau
Comparing regional gross domestic product growth is another critical economic development measure that companies consider. A region’s gross domestic product is the sum of its total economic output for the public and private sectors. Regions with growing economies are generally more attractive to companies considering a corporate site location decision.
Source: St. Louis Federal Reserve, FRED
As the chart above illustrates, the Detroit region remains much larger from a total economic output standpoint than many peer cities. As the chart above illustrates the following cities enjoyed a robust growth in GDP: Austin: + 113.16%; Nashville: + 93.33%; Charlotte: + 95.0%; Columbus: + 69.71%; Detroit: + 47.14%; and Cleveland: + 43.24%. This comparison of overall economic growth illustrates Detroit, like all cities in the Midwest, is lagging competitors in the South and Southwest in overall economic growth. Demographic and economic data for Michigan’s urban regions provides a mixed bag from an economic performance standpoint. The regions constitute large and growing economic markets but, again like most of their Midwest urban markets, are growing at a slower rate than booming southern regions.