Business Leaders for Michigan says state lagging in economic growth

Michigan’s leaders need to put aside political differences to create a consistent economic development strategy as the state is projected to fall further behind others in economic growth, according to Business Leaders for Michigan.

The state’s business roundtable on Thursday shared its annual benchmarking, which placed Michigan at 29th in economic growth of the 50 states after some revamped metrics that now include more measurements from education attainment to business climate perception to poverty.

The ranking is improvement from the Great Recession, but that standing could worsen in the coming years if the organization’s projections are true. The gap in Michigan’s economy compared with the nation’s when indexed to 2008 levels widened 22% during the pandemic since 2019. The difference could increase another 73% by 2030, leaving the Great Lakes State further behind.

Jeff Donofrio, CEO of the Michigan Business Roundtable

“There needs to be a certainty and a consistency to how we approach economic development,” Jeff Donofrio, the roundtable’s CEO, told The Detroit News. “Many times not just n economic development, but particularly in economic development, our strategy seems to pivot every time an officeholder changes hands, so a new governor comes or new legislature.

“Sometimes we put things in place, and there’s a big ribbon cutting or press release or splashy event, and then a couple years down the road, we pull funding from it.”

The goal is to be a top 10 state. That group currently includes Utah, Washington, Colorado, Texas, Massachusetts, Virginia, California, Oregon, Florida and Arizona. All have strong showings in economic growth, education and talent.

The forecast comes as a critical time, especially for the state’s automotive industry that is undergoing a historic transformation to electric vehicles with billions of dollars in investment and thousands of jobs at stake. Michigan is underperforming for battery plants with just two of 12 announced in North America and another six whose locations are pending, according to the roundtable. The state has roughly a quarter of U.S. internal combustion engine-related jobs, and EVs have fewer parts.

By 2025, 43% of Michigan’s 14 assembly plants — that’s six plants total — will produce EVs compared with 37% nationwide, according to the analysis. Almost 170,000 of 290,000 automotive jobs are potentially affected by the move from ICEs, including 46,110 directly touched across 310 companies.

General Motors Co. is looking to manufacture batteries on the property of its Lansing Delta Township plant, and LG Energy Solution plans to invest in its battery plant in Holland. Meanwhile, Ford Motor Co. last year announced an $11.4 billion investment to manufacture EVs and batteries in Tennessee and Kentucky, which created a public spat with Gov. Gretchen Whitmer. But the state of Tennessee was working for 20 years to ready the massive site Ford chose for investment.