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Michigan Primary Surprise: The Midwest Is Leading the National Economic Recovery

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Every four years the swing states of the Midwest are in the national spotlight. The upcoming Michigan primary, followed by Ohio's on Super Tuesday, once again have the nation abuzz about economic conditions in the nation's heartland. The state of the region, and especially hard-hit Michigan, following the Great Recession is without a doubt an enormous factor in these upcoming primaries -- as it will be in the general election.


While the media from outside of the Midwest will latch on to a tired old storyline about the challenges of the past few years, the nation should also tune into the region's quiet strength. In fact, the Midwest is not only resurgent -- it is leading the national economic recovery. An area once described as the "Rust Belt" is now emerging as a shining new economic engine.


In a recent address to the Detroit Economic Club, I was amazed by the optimism and energy of the local business community and government. The economic resurgence that the State of Michigan and the broader Midwest has patiently sought, and for which it has toiled, is very much underway. Witness the rebirth of manufacturing led by the auto industry.


The jobs numbers are improving, incomes are up, and so is consumer spending. Companies are moving into the Midwest, and while large parts of the rest of the country's economy are still slumbering, the Midwest economy is demonstrating healthy growth.


The Midwest Economy Index (MEI) recently reported that Midwest growth outperformed its historical deviation with respect to national growth. This means the Midwest economy is doing better relative to the nation than it did in the past. Estimates of annual growth in Gross State Product for states included in the MEI were at or above U.S. GDP growth through the third quarter of 2011. Michigan, in particular, is expected to have the highest growth rate in the country in the first six months of 2012.


The resurgence of Michigan and the Midwest is closely aligned to the resurgence of manufacturing. But this time it's not simply a story about new factory orders. It's much more than that. Midwestern manufacturing has retooled -- improving both the products we make and making those products more efficiently.


Automakers are leading the way, producing vehicles that consumers really desire with new technology that improves fuel economy and safety while delivering performance, all at a reasonable price.


The automakers' performance has had a trickle-down effect across the region, once again leveraging the skilled workforce and infrastructure that make the Midwest special. We have seen this in Michigan and in surrounding states. For example, Honda is planning to build a factory to globally manufacture a new Acura model line. Honda has also announced an investment of $98 million at its engine plant in Anna, Ohio. This comes on top of a recent investment of $120 million at its transmission plant in Russells Point, Ohio.


We know how to make things in the Midwest. No matter how much the economy changes, we still need cars and office furniture. We need steel, and tool and die companies. We have retained those skills. And we've trained workers in the use of computers, robotics and flexible manufacturing.


The resurgence of the Midwest is due in large measure to the strengths that originally made this region the manufacturer to the world. We have people with knowledge, skills, motivation and training. We also have many of the raw materials we need to make the steel needed to build bridges, buildings, cars -- even washing machines and dryers.


One of the biggest challenges to the national economic recovery is sluggish job growth. The Midwest is in the business of attracting jobs and business investment. Additionally, the Midwest is focused on diversifying the industries in the region and retraining workers to make sure there is a good fit for the needs of today's twenty-first century companies and the workforce.

Unemployment numbers remain high, but unemployment numbers in many areas of the Midwest are now below the national average. Nationally, unemployment dropped to 8.5 percent in December. But in Ohio, we saw unemployment drop to 8.1 percent. In Michigan, the numbers are higher but importantly, the jobless rate has fallen to 9.3 percent, the lowest since September of 2008.


The economy has not fully healed. But the one message I hope the nation picks up on throughout the primaries is that the Midwest economy is surprisingly resilient and on a growth trajectory -- and that it can serve as an example for nationwide recovery.