2022 State of the Region
Sandy K. Baruah, President and Chief Executive Officer, Detroit Regional Chamber
This year’s report is different than previous iterations because of the ongoing impact of the COVID-19 pandemic as well our increased focus on the racial disparities in our region and how these detrimental outcomes impact our overall economic health – and all of us individually. Additionally, this report seeks to highlight the apparent disconnect between how individuals feel about their own economic situation versus how they view the state of the overall economy. Despite exceptionally strong data indicating individuals feel very secure in their jobs and continue to spend strongly, as well as strong GDP and unemployment data – individuals have a notably sour mood toward the economy driven by concerns about inflation.
Thank you for your interest in the Detroit Regional Chamber’s eighth annual State of the Region report; and a deep thanks to our friends at Citizens for their partnership in bringing this valuable data to the region.
In last year’s report, the Chamber showed that Michigan’s economic recovery from COVID-19 was faster and more robust than the state usually sees during recessionary periods because sectors like automotive and manufacturing displayed remarkable resilience and new business starts soared. In 2021, Michigan continued its strong economic recovery with a 12.7% growth in real GDP during the second quarter – Bloomberg ranking Michigan’s economic improvement the best among the 37 states with a population greater than 2 million. “Michigan is number one based on equally weighted measures of employment, personal income, home prices, mortgage delinquency, state tax revenue, and the stock market performance of its publicly traded companies.”
Michigan’s economy still faces significant challenges that pose short-term and long-term obstacles to our region’s economic prosperity. Despite a substantial increase in job postings in the region throughout 2021, many of these positions continue to go unfilled. This is a national trend, but Michigan’s labor force participation lags significantly behind other states. More Michigan women than men – 136,000 to be exact – left the labor force in 2020 as well as a significant number of older workers. Labor shortages hindered the economy before 2020, but COVID-19 exacerbated this trend.
Challenges with labor, supply chain issues, a spike in demand for goods, and a large influx of government spending are just some of the multitude of reasons Michigan and the United States have seen the highest inflation levels in 40 years. Statewide polling by the Chamber and Glengariff Group showed that 90% of voters are concerned about inflation and 63% of voters feel the economy is on the wrong track. However, people’s pessimism contrasts with consumer behavior and other promising signs of economic growth.
As businesses, workers, and the broader economy transition to a post-COVID-19 pandemic reality, it is critical that our society takes the necessary steps to ensure that large-scale investments encourage equitable growth that promotes long-term prosperity for all Michiganders.
Jim Malz, Midwest Regional Executive , Citizens
Our journey to recovery from the pandemic has had its twists and turns, but I believe that we are headed in the right direction and that together we can face any challenges that remain in front of us.
We are proud to support the Detroit Regional Chamber, one of the organizations leading the region’s recovery, and to be part of the State of the Region, which provides critical data to inform our recovery efforts.
With the disruption wrought by the pandemic, it remains crucial that the private, public, and nonprofit sectors work together to ensure that workers, small business owners, and families have the skills and support they need.
Our businesses can only thrive when our communities thrive. To that end we are partnering with The Greening of Detroit, Grow Detroit’s Young Talent, and Focus: HOPE to prepare adults and youth for sustainable employment. We work with the Great Lakes Women’s Business Council to strengthen and grow women and minority-owned businesses, and we support the efforts of United Way and others to address digital inclusion, which is essential for economic inclusion, as the pandemic widened the digital divide for many families. Through our long-time partnership with Gleaners Community Food Bank to present the Hunger Free Summer campaign, we assist children facing food insecurity during the summer months when they are out of school.
Recovery from the pandemic is far from over, but we are on this journey together. We will continue to serve as trusted advisors to our customers and community partners as we look to an even better future of opportunity and economic prosperity for the city of Detroit and the region.
Disclaimer: The State of the Region 2022 interactive storymap is best displayed on a standard laptop screen. The storymap can also be viewed on tablet devices but interactive charts will not be displayed on mobile devices. To view the report on a mobile device please visit, detroitchamber.com/sor
Positioning the Region for Economic Prosperity
The Detroit Regional Chamber leads an economic prosperity strategy to ensure the 11-county Detroit Region is educated, employed, and equitable. The Chamber’s portfolio of initiatives aims to create an economic future where all businesses and individuals can grow and thrive.
Defining the Region: 2020 Census Results
The Detroit Region is a united 11-county area that encompasses more than 300 municipalities and 7,062 square miles with rich geographic, human, and business assets. Home to numerous best-in-class educational institutions and more than 376,000 businesses including 10 Fortune 500 companies – the region has the talent, resources, and cutting edge facilities to drive innovation. Anchored by the city of Detroit and located on an international border, the region offers unrivaled opportunities to compete in the global economy. with more than 5.4 million people, the region has seen 1.9% population growth since 2010.
THE DETROIT REGION
The 2020 Census indicated that the 11-county Detroit Region’s population increased to 5,492,836 – a 1.9% increase since the 2010 Census.
Five of the 11 counties saw a decline in population. The counties with the largest population growth include Washtenaw, Livingston, and Oakland. The counties with the largest decline include Genesee, Shiawassee, and St. Clair.
The city of Detroit remained Michigan’s most populous city but showed a continued decline in population of 10.5% over the decade, losing almost 75,000 people.
STATE OF MICHIGAN
Overall Michigan’s population increased to 10,077,331, a 2% gain since 2010. Michigan ranked as the 10th most populous state (8th in 2010).
The state’s population growth was behind the U.S. growth rate of 7.4%. As a result, the state will lose a seat in the U.S. House, from 14 to 13 representatives.
Two factors will continue to influence Michigan’s population for years to come: the state’s aging population and changes in migration. Overall, 50 out of 80 counties experienced a decline in population.
CHANGE IN RACE AND ETHNICITY
For the 2020 Census, the U.S. Census Bureau changed phrasing and allowed more detailed reporting of race and ethnicity. Thus, the 2010 and 2020 Census represents both changes in demographics of the population as well as changes in how people were recorded.
The fastest growing demographic in the Detroit Region is Asian residents, which grew by 45%, followed by residents who identify (ethnically) as Hispanic or Latino (31%). The number of residents identifying as Black or African American (-2.6%) and white (-4.1%) all decreased.
The Chamber shares the concerns of many that COVID-19 and changes to the census data collection efforts resulted in the under-counting of Detroiters.
Key Economic Highlights
In this section, the Chamber explores the key economic highlights from the 2022 State of the Region report. These indicators are important in providing a comprehensive picture of the region's and State of Michigan's economy and its continued recovery from COVID-19.
Real GDP
Strong Recovery in National and Michigan Real GDP in 2021
Real GDP: United States
In a powerful rebound from 2020,real GDP grew 5.7% in 2021, the fastest growth in decades. In the second half of 2021, companies worked to address consumer demand and increase inventories, driving GDP growth.
Real GDP: Michigan
Michigan ranked 14th in real GDP, totaling $445 billion, in 2020 despite dropping 4.6% annually. Strong quarterly growth throughout 2021 was led by a 12.7% increase in the second quarter, largely driven by significant growth in accommodation and food services (107.8%).
Filter graph to view Michigan GDP
Real GDP: Detroit MSA
The Detroit region’s 2020 real GDP decreased to $220 billion, ranking the region 16th in the U.S. The decrease of 5.8% over 2019 was driven by manufacturing (-7.2%), professional and business services (-6.4%), and entertainment, accommodation, and food service (-33.2%).
Filter graph to view Detroit MSA GDP
Private Sector Jobs
Detroit Region Down Nearly 56,000 Private Sector Jobs Since Early 202 Despite Gains Through 2021
The Detroit region reached just under 2.1 million private sector jobs by December 2021, remaining 56,100 jobs below early 2020 levels. Since January 2021, private sector jobs steadily increased 7.3%, by 141,700 jobs. The region remains down 2.6% in private sector jobs since February 2020.
Labor Force Participation
Labor Force Participation Across the Nation and in Michigan Has Dropped Since the Beginning of 2020 and Has Been Hovering at 61% Since 2010
Michigan’s rate lies at 59.6% as of December 2021, down from 61.5% in early 2020. Nationally, Michigan is ranked 40th among states in labor force participation, with the nation’s rate at 61.9%.
Many workers exited the labor force over the course of the pandemic, in part due to in-person school closings and challenges with child care. Women in Michigan left the labor force at greater rates than men in 2020. A 5.8% decline, or 136,00 women, left the labor force in 2020. Recovering from early pandemic losses, the male labor force was up 18,000 or 0.7% in 2020 in Michigan.
Unemployment Rate
Detroit MSA’s Unemployment Rate Reaches Pre-Pandemic Levels
The Detroit MSA unemployment rate dropped 6.0 percentage points in December 2021 from the same month the previous year. Over the year, total employment rose by 101,000, while unemployment dropped by 129,000.
Long-term unemployment in Michigan, as measured as the percent of individuals that have been unemployed for more than 26 weeks, decreased slightly to 37.2% in December 2021, an indication of reaching a peak, after steadily increasing since August 2020.
In 2021, the unemployment rate in Michigan of Black or African American residents reached 11%, while the rate for the total labor force was 5.7%, and 4.8% for white residents.
Explore the Chamber's Detroit Data Center for up-to-date county, regional, and state monthly unemployment data.
Unemployment Rate by Education Level
Higher Education Consistently Shown to Improve Labor Market Outcomes
In Michigan, individuals with higher education attainment consistently experience lower levels of unemployment. Unemployment rates for high school graduates were 2.5 times higher than those with bachelor’s degrees or higher.
Nationally in 2020, earnings also increased with education attainment. Workers with a bachelor’s degree or higher earned a median of $66,423, compared to high school graduates who earned a median of $34,540 over the course of 2020.
In the Detroit region, the share of adults with a bachelor’s degree or higher varies greatly by race – 35% for white adults, 23% for Hispanic adults, and 19% for Black adults.
As educational attainment is associated with workforce outcomes, increasing overall education attainment for the region would positively impact the worker’s job options and address talent shortages.
Consumer Spending
Nationally, Spending on Services Surpasses Pre-Pandemic Levels
Over the course of the pandemic, spending patterns shifted as consumers increased spending on goods over services. Services spending reached pre-pandemic levels by Q2 of 2021 and have steadily increased each quarter since then.
Consumer Price Index
Detroit Region Prices up 7% from Previous Year
Prices in the Detroit MSA rose 7% over the last 12 months, as measured by the Consumer Price Index for All Urban Consumers (CPI-U). December 2021 core prices, which include all items less food and energy, rose 5% the same time period.
Not all categories are demonstrating similar rises in prices over the past year. The largest percentage increases in the region can be seen in used cars (37.9%), energy (27.4%), including higher prices for gasoline (54.8%) and piped gas service (17.7%), and food (9.6%), with the largest food price increases in meat, poultry, fish, and eggs (20.3%).
Nationally, year-over-year CPI rose 7% from December 2020 to December 2021, the largest increase since June 1982.
Jobs Recovered by Industry
Total Nonfarm Employment Recovered 91% of the Jobs Lost During the Pandemic
In the Detroit region, the impact on employment and the recovery has not been consistent across all industries.
The hardest hit sector from the beginning of the pandemic was Leisure and Hospitality. The sector has recovered 74% of its jobs, but despite a huge improvement, accommodation is still down 28,900 jobs, 15% off its February 2020 levels.
Professional and Business Services lost 79,000 jobs from February 2020 to April 2020. As of December 2021, the sector has gained 91,200 jobs back, gaining 3% or 12,20 more jobs than pre-pandemic.
Overall, total nonfarm employment has recovered 471,400 jobs or 90.7% of the jobs lost from the initial pandemic loss. As of December 2021, employment is still down 48,400 jobs or 2% below pre COVID-19 levels.
New Business Applications
Michigan Business Applications Hit Record High in 2021
In 2021, Michigan ranked 11th in most business startups among all 50 states. New business application growth after a recession is a leading indicator of recovery and future economic growth, and often observed after times of economic hardship. Strong business application growth was not experienced in the years following the Great Recession, with applications declining for three years following 2010.
Michigan business applications totaled 150,740 for 2021, a 59% increase compared to pre-pandemic levels in 2019, indicating strong entrepreneurial activity. More than 55,950 additional applications have been filed in 2021 compared to 2019.
According to IHS Markit’s Small Business Jobs Index, Michigan ranks 16th among states with an index level of 99.48, and the Detroit MSA ranks 18th among metros. Michigan’s small business employment has increased 5.3% during the past 12 months.
Racial Economic Equity
The Chamber is a premier, trusted source of business data for the region, and its Research and Data Team is leveraging its resources and expertise to stay at the forefront of economic and social equity data as a key part of its Racial Justice and Economic Equity initiative. This data enhances and offers new, valuable insights to Chamber Signature Reports and Publications, including this edition of the State of the Region. This equity lens is critical to establishing comprehensive understanding of and context around the economic recovery – and remaining disparities – that the latest data reveals. Such insight provides the opportunity to identify areas of improvement in which the regional and statewide business community can work to develop solutions for a more equitable economy.
Only Half of Children Earn More Than Their Parents by Adulthood
A key aspect of the American dream is the aspiration to be a country that through hard work any child has the chance to rise up through income distribution compared to their parents.
However, the percent of children earning more than their parents has steadily decreased since the 1940s. This fundamental change in the economy is of social and political interest also as the trend reflects a country where it is no longer easy to get ahead.
The Opportunity Atlas
The Opportunity Atlas,- uses data to answer the question, "which neighborhoods in America offer children the best chance to rise out poverty?"
Using the data from Opportunity Insights, the Chamber mapped the 11-country Detroit region displaying how much individuals earn in their mid-30s based on where they grew up.
Neighborhoods where kids went to earn lower average incomes are displayed in red; places where kids grew up to earn more are in blue. This map explores children's outcomes who came from low-income families in the region.
Display the following:
Finding Opportunity in Detroit
According to Opportunity Insights data, economic outcomes for low-income children in Detroit are poor compared to low-income kids in the suburbs.
When comparing children's outcomes only to peers of the same race, the patterns look very different.
Two patterns emerge when displaying the outcomes of Black children in low-income families.
- There are not enough Black children to estimate outcomes in neighborhoods outside of Detroit. Those are displayed in grey.
- The map becomes nuanced within the city of Detroit, allowing readers to identify neighborhoods that provide good outcomes for Black children.
Racial Disparities Evident Between Upward Mobility Rates in City of Detroit
The work of Opportunity Insights has traced the income levels of 20 million Americans from childhood to their mid-30s. The results show upward mobility varies greatly across different parts of the United States, as measured by the increase in average incomes of children who grew up in low-income families to higher levels of income in adulthood. In addition to place, race also has a connection to upward mobility, as populations with larger Black populations have lower upward mobility than populations with larger white populations.
The Detroit region is seeing variation similar to other areas across the U.S. Regionally, some of the highest levels of upward mobility are found just a few miles away from the city of Detroit where the lowest rates of upward mobility are present
According to the latest data, the Detroit region has experienced low job growth rates along with low upward mobility. Regions with higher job growth rates, do not ensure higher upward mobility, as demonstrated in Atlanta and Dallas. Higher upward mobility is seen where there is less concentrated poverty, greater school quality and greater social capital, such as connections to higher income resources. With the focus on disparities that emerged during the pandemic, there is an opportunity to develop fundamental policy change and connections which could lead to inclusive growth and recovery.
Per Capita Income
Regional Per Capita Income Exceeds National Rate by 2.2 Percentage Points
Real per capita personal income in the Detroit MSA increased 7.1% in 2020 to $54,256. The Detroit MSA’s growth is 2.2 percentage points above the national growth rate of 4.9%, reaching $53,504 in 2020. Additionally, the state of Michigan’s real per capita income increased 8.2% from 2019 to 2020, ranking second among all states.
Nationally, hourly wage workers have also experienced wage gains, especially in pandemic-affected industries like leisure and hospitality and retail. In the Detroit region, Black or African American workers have higher shares of workers in these industries. Overall, wages for hourly workers have increased 3.8% in December 2021, as measured by a 12-month moving average.
Additionally, the average income per capita continues to increase in the Detroit MSA but income gaps between races still exist. The mean income per capita gap between White-Black or African American population is $16,595 and the income gap between Asian-Black or African American population is $18,799 in 2019.
Explore the Detroit Regional Dashboard for critical economic and social metrics including equity measures, helping identify roadblocks to development & increasing prosperity.
The Dashboard serves as a catalyst for strategic change and collective action, ensuring the Detroit Region continues to move forward as a thriving and equitable community. Visit DetroitChamber.com for more information.
Home Prices
Demand for Single-Family Homes Pushes Sale Prices Up Through 2021
Housing market activity continues to be strong in the region, as supply of homes remains low bolstered by attractive mortgage rates. Listings in the Metro Detroit area were down 9.8% in November 2021 compared to November 2020. Total sales in units were also down 4.5% for the same period. Median sale prices for 2021 continued to rise for single-family homes, up 11% over 2020.
Average home values in the city of Detroit increased 30% over the past year, however homeownership has decreased among Black residents in the city over the past decade, dropping from 53% in 2010 to 47% in 2019, shutting out residents from gains in home equity.
The 2019 Black or African American homeownership rate (43.4%) in the Detroit MSA is higher than the U.S. by 1.4 percentage points but the rate is less than White (78.4%), Asian (65.2%), and Hispanic or Latino (58.6%) homeownership in the MSA.
Public Transportation Ridership
Public Transit Ridership is Down 62% From Pre-Pandemic Levels
Public transit is a critical infrastructure for communities, especially during a pandemic, and many residents heavily rely on these systems to help them perform essential activities. In the beginning of 2020 more than 3.7 million riders used public transit in the Detroit region. Public ridership saw steep pandemic-related declines in early 2020. The region experienced the largest drop in use during April 2020, an 83% change in ridership compared to April 2019.
As of 2021, public transit ridership in the region had yet to make a strong recovery, down 12% compared to 2020 and down 62% compared to pre-pandemic levels.
Declines in public transit use have been an ongoing result of the pandemic, however the Chamber continues to champion the need for reliable, accessible transit for the region. In the region, Black or African American residents account for 79% of the total public transit commuters.
Due to low ridership, agencies across the region have had substantial services changes and face employment shortages as seen in other industries.
2022 SOR Report
Read the eighth edition of the State of the Region report
