Michigan’s economy will continue to do well but not be as robust as the last five years and one key factor is a downtick in vehicle sales.
To be sure, nobody was singing “Happy Days are Here Again”, which was sung when the country came out of its depression back in the 1930’s.
But the state’s economy is not a ten.
“On a scale of one to ten, maybe a six or seven solid,” says Federal Reserve economist Martin LaVelle. “Not spectacular but not terrible.”
One of the reasons it is not spectacular is the “U word”.
“One of the dangers of national and international events is uncertainty,” adds LaVelle. “The uncertainty is worrisome.”
Businesses hit the pause button in the aftermath of the U.S. military base bombings in the Middle East this week.
Minus that uncertainty factor, the State Chamber of Commerce CEO is checking off all the boxes.
“A lot of the economic indicators are very positive,” explains Rich Studley. “Interest rates have ticked up a bit but still at historic lows. The state has over a billion dollars in the rainy day fund. Employment is up. Unemployment is down and inflation appeals to be manageable.”
Any state economic forecast must include the outlook for light vehicle sales. For five years, over 17 million units were sold, an unprecedented number.
But not any more. Is it time to panic?
“I wouldn’t say panic. It’s not what it was,” explains LaVelle. “It will be slightly off but still profitable for the Detroit Three but not as profitable with maybe some slight dip.”
Sales should be come in around 16 million or so.