The University of Michigan’s 66th Annual Economic Outlook Conference discussed research on the national and state economic future, especially as a recession rapidly approaches. The program’s 10 presentations, held between Thursday and Friday, spanned talks from “Election Implications for Small Business Spending and Hiring” to “NAFTA, Tariffs, and the U.S. Automotive Industry.”
The conference was organized by the Research Seminar in Quantitative Economics, a modeling and forecasting unit in the Economics Department that provides quarterly forecasts for the U.S. and Michigan economies. The conference is the longest running one of its kind in the U.S. , and is attended by upper level government and business economists, economic analysts, and academics.
RSQE Director Gabriel Ehrlich spoke about Michigan’s economic outlook at the conference on Friday. In his presentation, he emphasized the incoming recession, importance of international immigration to Michigan’s economy, and Michigan’s need to find and keep younger, well-educated adults for continued growth.
When speaking about immigrants, Ehrlich mentioned that overall, immigrants are more educated than Michigan as a state.
“About 41 percent of adult immigrants in Michigan, so aged 25 and over, have a bachelor’s degree or more,” Ehrlich said. “And that’s relative to 29 percent of the state overall. So international migrants to Michigan are actually a relatively well-educated group of people.”
Ehrlich’s primary concern was for Michigan to continue educating and to maintain a young working population to further state economic growth.
“Producing, retaining and attracting well-educated young people is absolutely vital to ensuring our future prosperity as a state,” he said. “And so far this decade, we’ve actually been doing a pretty good job of it.”
To emphasize Michigan’s improvement in this metric, he highlighted data comparing demographic changes from 546 areas in the U.S., which showed Michigan cities having better growth in young, college-educated adults than the country as a whole — a positive result for the state.
“The city of Detroit is ranked 39th in growing its population of college-educated young adults since 2010,” Ehrlich said. “And Grand Rapids actually ranks 63rd … The state of Michigan actually does better than the United States overall.”
In another talk Friday, “Has the Housing Market Peaked,” David Berson, senior vice president and chief economist for Nationwide Mutual, discussed Michigan’s current housing market and how it compares now to the market a decade ago.
Recalling the housing bubble in 2006 and 2007 that eventually led to the housing crisis of 2008, Berson posed the question, “It does appear that the housing market has peaked, but is it a peak as we saw it in 2007?”
Berson stressed the importance of paying attention to more factors than the job market to analyze the housing market.
“If all you did was look at delinquencies and the job market, well, people would never said in 2005 that we were on the cusp of the biggest housing downturn since the Great Depression,” Berson said. “Look at the other components.”
Ehrlich on the whole was optimistic about Michigan’s economic outlook, saying the state has so far been fairly successful in its growth.
“To sum up our forecast, we’re expecting steady, if slower, job growth over the next few years,” he said in closing. “Along with low unemployment, inflation and solid income growth. And considering how far along we are in this economic expansion, we think that outlook is about as good as it gets.”
LSA senior Sylvie Evarts, who is studying economics, said she is reassured by the potential for young professionals to continue growing the state’s economy.
“While it is well known that the national economy has been steadily improving, it is very encouraging to hear that Michigan is also in a positive position,” she said. “The focus on the need to keep younger, educated adults in the state, highlights the importance of the revitalization of Detroit, and all of the potential job opportunities that could continue to draw this younger demographic into the state.”