Moody’s says that Detroit’s economy is better now, with a positive credit outlook, a year after exiting bankruptcy. Air traffic through Detroit Metro grew last year, with more new routes planned for this year. Auto show attendance was up, and the event is estimated to have contributed more than $400 million to the area economy. A milder-than-usual winter has helped to support strong housing numbers through the winter, placing housing starts at their strongest pace in almost a decade. New multifamily developments exceeding $50 million, like the Scott at Brush Park, are becoming more common across the area. Some investment estimates are placing the multi-use Red Wings Arena District north of $1 billion. The area economy is booming.
December’s labor data for the Detroit area points to the same shift away from manufacturing evident nationally. Year-over-year employment growth in both the financial activities and mining/logging/construction sectors eclipsed five percent in December. Other high-paying sectors, like professional/business services, education/health services, and trade/transportation/utilities are still growing by two percent or more year-over-year. Although weaker than national numbers, Detroit income growth is still beating consumer prices.
Demographics are a limiting factor for Detroit. Detroit is still seeing negative net migration. Unfortunately, the most mobile population tends to have a brighter economic potential, pulling away incrementally from Detroit’s labor force and economy. This mismatch is evident in the acceleration in area income, as employers become more desperate to fill positions. The Detroit Free Press stated that in 2014Q4, about 44 percent of Detroit job openings required at least a bachelor’s degree, compared to the 21 percent of Wayne county residents meeting the qualification. Detroit will have to attract a lot of professionals to maintain momentum.
Click here for the complete South East Michigan Regional Economic Update: SEMI 2016Q1.