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Michigan makes top 25 states in fifth annual study on economic competitiveness

January 23, 2017

Northwood University economists examine economic competitiveness across all 50 states, with focus on Michigan and Great Lakes regionMIDLAND, Mich. – The Michigan Chamber of Commerce and research partner Northwood University in Midland, Michigan, released the results of the 2016 Economic Competitiveness Study. In the most recent study, Michigan has climbed from number 29 in 2015 to number 25 in 2016 on Northwood University’s proprietary State Competitiveness Index.

This marks the fifth year of the exhaustive study into all aspects of Michigan’s economy and how the state fares against the other 49 states. Results of the inaugural study, released in 2012, ranked Michigan number 47 based on data from 2000.

“This study offers the most detailed and honest assessment of the state’s economy,” said economist and study director Timothy Nash, vice president of strategic and corporate alliances and the Director of the McNair Center for the Advancement of Free Enterprise and Entrepreneurship at Northwood University. “The largest single factor influencing the Michigan economy was a stronger general macroeconomic environment in the state over the last five years relative to the other 49 states.”

Although Michigan showed signs of slowing in 2015, Nash noted the ranking of 25th is over a period of time, using economic data from 2000 until 2016.

“Clearly, strong progress has been made since our first study in 2012,” he said.

The study also reveals Michigan is the among the top-performing Great Lakes region state, with average personal income growth increasing at an average rate of 4.0 percent over the last five years. This rate is better than the Great Lakes region’s average of 3.75 percent, and equal to the U.S. average of 4.0 percent. Analysis of cities included in Great Lakes rankings included Chicago, Illinois; Cleveland and Columbus, Ohio; Detroit, Grand Rapids and Lansing, Michigan; Indianapolis, Indiana; and Milwaukee, Wisconsin.

“As data from the report reveals, the overall U.S. economy has not performed as well as its historical norm, especially over the past five years since the study began,” said Keith Pretty, co-author, president and CEO of Northwood University. “However, statistics also show that Michigan remains on a growth trajectory. The state’s gross domestic product grew at a 2.28 percent rate over the last five years, ranking it as the best growth state in the Great Lakes Region since the study began.”

Michigan’s comeback continues

In a first-time snapshot of the last five years, Michigan ranks 13th nationally in competitiveness relative to the business tax climate. This factor is critical to job creation, attraction of new businesses and investment in human capital.

The Michigan economy has recovered on a more broad-based level than many suspect, said Bob Thomas, executive director of the Michigan Chamber Foundation.

“Our state has 19 Fortune 500 companies headquartered here. Of those 19, nine are non-automotive related and have been outperforming the general economy on average,” Thomas said. “Michigan’s relatively strong performance in terms of debt and taxation—in addition to our regulatory environment—play a strong role in our state’s ongoing growth trend, as this study reveals each year.”

“We are optimistic that Michigan will continue its path of strong recovery and growth to become a top ten state before 2020,” he added.

The full study is available via the Northwood University McNair Center for the Advancement of Free Enterprise and Entrepreneurship at


Click on the link below for the WJR 760 radio interview with Frank Beckmann:

Tim Nash and Rich Studley discuss 2016 Michigan economic competitiveness report with Frank Beckmann, January 23, 2017

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