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

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.

 

Comments

[bankserf]

12:43 AM on 02/29/2012

I have the misfortune of working for this author at Huntington Bank, and would like to know when all of this sunshine is going to trickle down to his employees, because, like most US employers, Huntington's current attitude towards its workers can be summarized as "be lucky you have a job." In my department, which can best be described as a clerical gulag, employees are worked to their limits, many are not earning a living wage, and workloads have skyrocketed due to downsizing through attrition. Either this author is writing spurious fluff, or I'm working at Huntington's Bizarro World branch. Although Steinour is all about outward appearances. He squeezes his workforce dry while pouring money hand-over-fist into branding and executive pay. While Huntington buys naming rights to stadiums, and redecorates every branch to look like an IKEA ad, behind the scenes it's all cost cutting and "sacrifice." So I'm not surprised Steinour has such a rosy opinion of the Midwest economy. Corporate officers are maximizing profits and their pocketbooks by cracking their whips with abandon, with an endless supply of terrified workers who'll tolerate all manner of abuses as their choices are limited to crap jobs and no jobs. If Steinour really cared about the economic vitality of this region, maybe he should start with his own workforce.

[gevan]

01:54 PM on 02/28/2012

Some would point to the Republican victories for governor in Ohio, Mich., Wisconsin, and Iowa in 2010 as somehow being instrumental in this happening.

[Cheryl2]

12:28 PM on 02/29/2012

You are aware that the Wisconsin economy is just now tanking? Seems the republican governor cost us our economy.

[gevan]

03:49 PM on 02/29/2012

Has Wisconsin withdrawn from the mid-west? Walker will claim this article shows his policies are working won't he? Just vote him out and be done with him.

[RAN1]

11:47 AM on 02/28/2012

41% of Illinois' economy is agriculture. Agriculture is booming. End of story.

[Obviator]

11:14 AM on 02/28/2012

Everything,e I see a different photo of Santorum I see Seinfeld or Sandler in there somewhere. Is he secretly Jewish? A comedian?

[Micheal Anderson]

10:37 AM on 02/28/2012

The first time a foreign car company builds a manufacturing plant in Michigan, then I'll be optimistic.

[Katie Scarlett OHara]

01:45 PM on 02/28/2012

I don't know about Michigan, but there is a Subaru plant in Lafayette, Indiana, and Subaru is a Japanese company.

[Micheal Anderson]

12:50 AM on 02/29/2012

There are foreign car companies in a lot of states, but none in Michigan. In Ohio, Indiana, Illinois, anywhere *but* Michigan, heh. We should be actively pursuing them.

[Patriot86]

10:12 AM on 02/28/2012

It is not surprising to those of us who understand the importance of manufacturing in this economy. Countries who make things have money and are prosperous...and have a middle class...those who don't are have and have not kind of countries and poor. Also, the only real stimulus big enough to help the economy was the auto loan which Pres. Obama did without Congress and their obstructing righties and blue dog syncophants...now mostly gone. The autos are leading the way towards recovery as they always do...bankers and the street enrich themselves but do nothing for middle class or this country...the idea that we can have a financial based economy would be a joke if it was not so dangerous.

[Viper]

10:03 AM on 02/28/2012

And all started by Obama placing Auto MFG as a priority since an auto is the second largest purchase we make and make every 5 years. And yet repub said we did not need an auto industry..lol

Also by bringing battery MFG back to the u.S., When he took office we were making no batteries. And additionally starting wind turbine and solar MFG... and even bringing back appliance MFg... Repubs thought that countries with heavy support for MFG, and trade surpluses were just a place to send more of our jobs..make stuff here.. of course not, only Wallstreet jobs really count!

Thee ignore the MFG jobs and economy multipler of 5 versus service industry 1.5!

Alll things the repubs were against and said were a wasteo f money.. that would fail.

You cant say you should run an economy, when in just 2.5 years you were proven so completely wrong... and in the 8 years before that so totally destroyed the economy.


regards

[pssdov]

10:01 AM on 02/28/2012

Read this quickly! The GOP s trying to have the story erased.

[judgeholden79]

09:49 AM on 02/28/2012

Good to hear. It has always been ironic and depressing that Detroit (and other midwest manufacturing cities), which played such a huge role in our WWII victory, should suffer so mightily while our former enemy has been able to maintain its manufacturing. If you look at Berlin and Detroit next to each other today, who would you think lost the war?