2
Thank you for your interest in the Detroit Regional Chamber’s seventh annual State of the Region report; and my thanks to our friends at Citizens for their partnership in bringing this valuable data to the region. This report is different from previous years because…2020. While the core data elements remain – we have taken a slightly different approach. This year, we highlight two unique factors: • •
How the COVID-19-induced recession compares with the Great Recession of a dozen years ago. How various industries and demographic groups experienced disparate outcomes in 2020 – exacerbating what economists call a “K-shaped” recovery.
A long-standing rule has been “when America gets a cold, Michigan gets the flu.” Usually, during recessionary periods sectors like automotive, manufacturing, and housing see steep declines. In 2020, however, these sectors remained remarkably resilient – even showing strength. These factors, coupled with Michigan’s ability to manage the virus relatively well, have placed our state in better shape than past recessionary periods. The relative strength of some sectors and individuals throughout the pandemic is contrasted by a disproportionately negative impact on others. While durable goods have been strong, our restaurants, health clubs, movie theaters, and other businesses critical to our communities are often dealing with catastrophic outcomes with too many establishments being forced to shutter their doors.
Last year was a true test of the strength and resiliency of our region. Like many great cities around the world, Detroit was hit hard by the pandemic. At this time last year, the long, slow recovery from the Great Recession seemed ready to shift into a higher gear, and then the pandemic turned a decade’s worth of economic progress upside down. We have lost loved ones and livelihoods. More than 2.2 million initial unemployment claims have been filed in Michigan since March 2020, demonstrating the dramatic effects of the pandemic on small businesses. The government has provided unprecedented economic support, and the rollout of COVID-19 vaccines has offered hope. Citizens is proud to play a role in the recovery. We made more than 6,300 Paycheck Protection Program loans equal to more than $400 million, helping to save more than 53,000 jobs in Michigan. We have also offered resources and unrestricted funding to nonprofit community partners as they navigated the ongoing effects of the pandemic, including support for the United Way for Southeastern Michigan’s COVID-19 Community Response Fund. Citizens bolstered small businesses in Michigan with more than $500,000 in grants made directly to business owners and through funds established by Great Lakes Women’s Business Council and Eastern Market Partnership.
The same is true for workers. Statewide polling by the Chamber and Glengariff Group showed three-quarters of voters had only “minor” or “no” financial impact due to COVID-19, while one-quarter reported “major” or “catastrophic” impact. As the data that follows will show, the 25% of our neighbors adversely impacted are more often women, Black Americans, other persons of color, and in lower skilled professions.
We have spent the year working closely with our clients to help them face unforeseen challenges.
Our collective challenge for 2021 and beyond is how to win the recovery – and ensure recovery is equitable across our society. Knowing where we begin this challenge is a critical first step.
We want to thank all of you who have given us a chance to earn our role as your trusted advisor and we wish you a safe, successful 2021.
Sandy K. Baruah President and Chief Executive Officer Detroit Regional Chamber
Jim Malz Midwest Regional Executive Citizens
While the Detroit Region has experienced unprecedented impacts as a result of the onset of COVID-19, recent months have shown reasons for optimism as the economy and the region recover.
ECONOMIC INDICATORS
3
TA B L E
O F
CONTENTS 4
6
12
P O S IT I O N I N G T H E REGION FOR E C O N O MI C G ROW T H
ECON OMIC IN D ICATORS
COMMU N IT Y IN D ICATORS
17
23
27
I N D U ST RY I N D I C ATO RS
I ND U ST RY SPOT L IG HT: AUTOMOT IVE AN D MOBIL IT Y
IN D U ST RY SPOT L IG HT: AEROSPACE AN D D EF EN SE
31
35
I N D U ST RY S P OT L I G HT: H E A LT H C A R E
2 019 DATA
K-SHAPED RECOVERY In the months since the onset of the COVID-19 pandemic the economy is showing signs of a K-shaped recovery, with some segments of the economy showing improvements and gains, while other segments are suffering or slow to recover. Throughout the report, areas are denoted where the K-shaped recovery is demonstrated with uneven or divergent paths.
4
ECONOMIC GROWTH
P O S I T I O N I N G
T H E
R E G I O N
F O R
ECONOMIC GROWTH 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.
DETROIT
MICHIGAN 2030 PL AN
PROMISE
RACIAL JUSTICE
& ECONOMIC EQUITY
ECONOMIC INDICATORS
5
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 300,000 businesses including 10 Fortune 500 companies, and 1,300 foreign firms from 38 countries – 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 supported by robust logistics infrastructure, the region offers unrivaled opportunities to compete in the global economy. With more than 5.2 million people, the region has seen 0.5% population growth since 2010. The counties that have experienced the largest growth include Washtenaw, Livingston, and Oakland.
D E F I N I N G
THE REGION
P O P U L AT I O N OV E RV IE W 2019 NUMBER O F HOUSEHO LDS
POPU LATI ON 2 010
POPULATI ON 2019
2 010 - 2 019 % CHANGE
5 ,2 2 6, 352
5, 250, 988
0.5%
2,073,983
4 2 5,790
405,813
-4.7%
167,902
La p e e r
8 8 , 319
87,607
-0.8%
33,70 0
Lenawee
9 9 ,892
98,451
-1.4%
38,345
Li v i n g s t o n
18 0,967
191,995
6.1%
72,0 0 0
M a c o mb
8 4 0,978
873,972
3.9%
346,402
Monroe
15 2,021
150,50 0
-1.0%
59,929
Oakland
1 ,2 0 2,362
1,257,584
4.6%
504,585
S h i awa s s e e
7 0 , 648
68,122
-3.6%
27,593
Wa s h t e n aw
3 4 4,791
367,601
6.6%
141,245
1 ,8 2 0,584
1,749,343
-3.9%
682,282
7 1 3, 777
670, 031
-6.1%
263,688
9 ,8 8 3, 640
9, 986, 857
1. 0 %
3,935,041
D etro it Re g io n Genesee
Way n e
D etro it Mi ch iga n
2 019
SOURCE: U.S. CENSUS BUREAU, 2019 QUICKFACTS
ECONOMIC INDICATORS REAL GDP: MICHIGAN AND NATIONAL Following 2019 Growth, Detroit Region’s GDP Fell Further than Nation Amid Pandemic
REAL GDP Pe r c e n t C h a n g e Fr o m P r e c e d i n g Q u a r t e r
50 40
Detroit Region’s 2019 real GDP rose to $237 billion; ranked 16th largest in the U.S.
30
Michigan’s 2019 real GDP rose to $474 billion; ranked 14th among all states.
10
Quarterly changes to Michigan’s Real GDP fluctuated dramatically throughout 2020 as the pandemic drove economic contraction. As the state’s largest contributor to GDP, the manufacturing industry shut downs impacted these changes, with durable goods manufacturing decreasing 50.0% from Q1 to Q2 and rising 82.9% from Q2 to Q3 on an annualized basis.
44.2 33.4
20 2.4
0
0.9 -5
-10
-7.9
-20 -30
-31.4 -37.6
-40 2019 Q4
2020 Q1 United St ates
SOURCE: BUREAU OF ECONOMIC ANALYSIS
2020 Q2
2020 Q3 Michigan
7
J O B S BY I N D U S T RY, D E T R O I T R E G I O N 2020
JOBS BY INDUSTRY
95,661
3.7% Transport ation and Warehousing
Health Care, Government, Manufacturing Top 3 Industries in the Detroit Region
95,695
3.7% Finance and Insurance
3.7% Wholesale Trade
112,770
4.3%
Health care and social assistance account for 13.7% of the Region’s employment as its top industry.
Other Ser vices (except Public Administration)
Health Care and Social Assist ance
355,366
116,650
4.5% Construction
6.1%
Over 1.2 million people are employed across the top four industries (health care, government, manufacturing, and retail trade).
13.7%
95,261
159,059
325,0 0 0
211,828
297,158
12.5% Government
Administrative and Support and Waste Management and Remediation Ser vices
8.2%
11.5%
Accommodation and Food Ser vices
Manufacturing
Total job numbers decreased from 2.60 million in 2019 to 2.48 million in 2020, a 4.6% decrease year over year.
259,914 10.0% Ret ail Trade
GREAT RECESSION
COMPARISON
JOB LOSS BY INDUSTRY, 12-MONTH Manufacturing (2009) Leisure and Hospitality (2020)
-31.0
%
-42.1
226,961
8.8%
241,124
9.3% Professional, Scientific, and Technical Ser vices
Other
%
SOURCE: EMSI SOURCE: EMSI
PRIVATE SECTOR JOBS, DETROIT REGION COVID-19 Caused Initial Steep Decline, Eventual Leveling in Private Sector Jobs The Detroit Region began 2020 with 2.1 million private sector jobs. By April 2020, private sector jobs had reached a low of 1.5 million, a loss of over 556,000 jobs over two months. Month-over-month job gains leveled off through the year with a December 2020 job total of 1.9 million, a 10.0% decrease over the beginning of the year.
P R I VAT E S E C TO R J O B S , D E T R O I T R E G I O N Not Seasonally Adjusted 2,50 0
2,137.8
1,922.2
2,0 0 0
1,581.3 1,50 0
SOURCE: BUREAU OF ECONOMIC ANALYSIS
8
ECONOMIC INDICATORS M O N T H LY U N E M P LOY M E N T R AT E
Unemployment trends and job losses over the past year have shown the uneven employment effects that are taking place amid the pandemic-induced recession. Workers with less than a high school diploma, low-income workers, and Black and Hispanic workers have faced the highest levels of unemployment. While workers with bachelors degrees, higher income, and white workers have experienced the lowest levels of unemployment.
Not Seasonally Adjusted
UNEMPLOYMENT RATE
25%
Detroit Region Reaches Highest-Recorded Monthly Unemployment Rate Ever Amid Pandemic
20%
April 2020
24.2%
Detroit MSA United St ates
The Detroit Region’s unemployment rate peaked during the Great Recession in July 2009 at 17.2%, well below the peak seen in April 2020. However, the extended number of years in which the unemployment rate took to rise and fall during the Great Recession has not been replicated in this pandemic-induced recession. The unemployment rate has abruptly risen and continued to fall over the course of eight months in 2020. The Region’s unemployment rate rose in the last months of the year, as state wide shutdowns were enacted in an effort to control the spread of COVID-19.
April 2020
14.7% 15%
Dec. 2020
10.1% 10% Dec. 2020
6.7%
5%
0%
March 2019
April 2019
May 2019
June 2019
July 2019
Aug . 2019
Sept. 2019
Oct. 2019
Nov. 2019
Dec. 2019
Jan. 2020
Feb. 2020
March 2020
April 2020
May 2020
June 2020
July 2020
Aug . 2020
Sept. 2020
Oct. 2020
Nov. 2020
Dec. 2020
SOURCE: STATE OF MICHIGAN, DEPARTMENT OF TECHNOLOGY, MANAGEMENT, AND BUDGET
GREAT RECESSION
COMPARISON
PEAK UNEMPLOYMENT RATE, DETROIT MSA July 2009: %
17.2
April 2020: %
24.2
U N E M P LOY M E N T C L A I M S , M I C H I G A N
UNEMPLOYMENT CLAIMS, MICHIGAN
UNEMPLOYMENT CLAIMS Michigan Weekly Unemployment Claims Peaked at Nearly 1M in Spring 2020
996,374
1,0 0 0,0 0 0
CONTINUED CLAIMS
Initial Claims
80 0,0 0 0
Continued Claims
60 0,0 0 0
More than 2.2 million initial claims for unemployment were filed in Michigan since March 2020.
388,554
40 0,0 0 0
INITIAL CLAIMS
Weekly initial claims dropped to the 19,000 range through December, before ticking up to 30,000 for the week ending Jan. 2. Michigan’s continued unemployment claims reached a peak of 996,374 the first week of May 2020, before remaining around 200,000 per week through the month of December.
205,132 CONTINUED CLAIMS
20 0,0 0 0 30,456 INITIAL CLAIMS
0
Jan. 2020
Feb. 2020
March 2020
April 2020
March 16 MI Public Schools Close
SOURCE: UNITED STATES DEPARTMENT OF LABOR
March 24 MI Stay at Home Order
May 2020 April 15 Stimulus Payments Start
June 2020 June 1 MI Stay at Home Order Ends
July 2020
Aug . 2020
Sept. 2020
Oct. 2020
Nov. 2020
Dec. 2020
Jan. 2021
9
LO N G - T E R M U N E M P LOY E D, U N I T E D S TAT E S
LONG-TERM UNEMPLOYED
Pe r c e n t , S e a s o n a l l y A d j u s t e d
Long-Term Monthly Unemployment Rose to Nearly 40% Nationally
40
37.1
35
The nation’s unemployed workers experiencing long-term unemployment (27 weeks or more) rose to 37.1% in December from 4.4% in April. During the Great Recession, peak long-term unemployed as a share of total unemployed occurred in April 2010 at 45.5%, despite the monthly unemployment rate peaking the previous year in July 2009. The highest levels of long-term unemployed may yet to be seen for the COVID-19induced recession, as job losses remain high in industries such as leisure and hospitality.
GREAT RECESSION
COMPARISON
LONG-TERM UNEMPLOYED, U.S. April 2010: %
45.5
30 25 19.3 20 15 10 4.4
5
Dec. 2020: %
37.1
UNEMPLOYMENT RATE BY EDUCATION LEVEL
SOURCE: BUREAU OF LABOR STATISTICS
U N E M P LOY M E N T BY E D U C AT I O N L E V E L , M I C H I G A N
COVID-19 Emphasized State’s Unemployment Disparities by Education Level Michigan workers with more education experienced the lowest levels of unemployment through 2020, rising from 1.8% in March to 4.5% in December. COVID-19 impacts continue to demonstrate education’s role in improving labor market outcomes. Unemployment rates have continued to remain high for those with less than a high school diploma, reaching 16.2% in December 2020. Disparate levels of unemployment also occurred during the Great Recession, as those with less than a high school diploma reached the highest levels of monthly unemployment at 22.9%, compared to those with a bachelor’s degree or higher reaching a peak of 6.3%. America’s Divided Recovery report, from Georgetown University’s Center on Education and the Workforce, reported workers with the highest education levels gained the most jobs compared to those with less than a high school diploma in the years following the Great Recession.
20% 16.2%
15% 12.0%
10%
8.7%
5%
3.9%
9.4%
4.5% 3.1%
1.8%
0%
Less than High School
High School Graduates
Some College or Associates
SOURCE: U.S. CENSUS BUREAU, CURRENT POPULATION SURVEY (CPS)
Bachelors or Higher
10
ECONOMIC INDICATORS U N E M P LOY M E N T R AT E BY R A C E , M E N
UNEMPLOYMENT RATE DEMOGRAPHICS Persistent Racial Disparities Remain in National Monthly Unemployment Rates Nationally, unemployment rates have varied widely by race, ethnicity, and sex. This continued in 2020 as job losses affected workers in some demographic and industry sectors more than others. By December 2020, Black males were experiencing unemployment rates of 10.6%, compared to that of white men at 6.2%. While Black unemployment rates decreased in 2019 to the lowest recorded by the Bureau of Labor Statistics, persistence of racial disparities in the labor market continue.
United St ates, Not Seasonally Adjusted
20% 16.9% 16.3%
15%
12.9% 12.6% 10.6%
10%
9.2%
6.2% 5.1%
5%
0
Black/African American
Hispanic
White
Asian NOTE: HISPANIC INCLUDESETHNICITY ANY RACE. ARE NOTE: RATES FOR WORKERS OF HISPANIC INCLUDED FOR COMPARISON, AND ARE ALSO INCLUDED IN RESPECTIVE RACE CATEGORIES.
SOURCE: BUREAU OF LABOR STATISTICS
U N E M P LOY M E N T R AT E BY R A C E , W O M E N United St ates, Not Seasonally Adjusted 25% 20.5%
20% 16.4%
15%
15.3% 15.9%
10%
9.2% 8.2% 6.6% 5.6%
5%
0
Black/African American SOURCE: BUREAU OF LABOR STATISTICS
Hispanic
White
Asian NOTE: HISPANIC INCLUDESETHNICITY ANY RACE. ARE NOTE: RATES FOR WORKERS OF HISPANIC INCLUDED FOR COMPARISON, AND ARE ALSO INCLUDED IN RESPECTIVE RACE CATEGORIES.
11
FORTUNE 500 AND LARGEST PRIVATE COMPANIES The Detroit Region is home to 10 of Michigan’s 17 Fortune 500 companies with headquarters located in the state. Penske Corp. and Rock Ventures lead as the Detroit Region’s largest private companies with a combined revenue of more than $39 billion. Rock Ventures’ mortgage company, the largest in the nation, Rocket Companies Inc. issued an initial public offering in August 2020. Stellantis N.V., with its North American headquarters in Auburn Hills, employs more than 38,700 people in Southeast Michigan, and earned $85.9 billion in revenue in 2019.
2 0 2 0 F ORT UNE 5 0 0 CO M PA N IES R A NK 12
FORD MOTOR COMPANY
18
GENERAL MOTORS CO.
H Q CI TY
2 019 R E VE N U E ( $ M )
Dearborn
$155,90 0
D e tro it
$137,237
Blo o m fie ld H ills
$23,179
136
PENSKE AUTOMOTI VE GRO U P
166
LEAR CORP.
S o u th fie ld
$19,810
252
DTE ENERGY
D e tro it
$12,669
273
D e tro it
$11,618
312
ALLY FI NANCI AL BORGWARNER
Au b u rn H ills
$10,168
369
AUTOLI V
Au b u rn H ills
$8,547
384
MASCO
L ivo n ia
$8,235
460
AMERI CAN AXLE & MANUFAC T U R I N G
D e tro it
$6,644
SOURCE: FORTUNE MAGAZINE, 2020
2 0 2 0 L A RG E ST P RI VAT E C O M PA N I E S RANK
2019 R E V E N U E ($ M )
1
PE N SK E CO RP.
2
RO CK VE NTU RE S
$7, 841
3
I L I TCH H O L D I NG S I NC.
$3, 90 0
4
U NI TE D WH O L E SAL E MO RTGAGE
$3, 20 0
5
PL ASTI PAK H O L D I NG S I NC.
$3, 109
6
$2, 880
7
PI STO N G RO U P MO RO U N FAMI LY H O L D I NG S
8
TH E SU BU RBAN CO L L E CTI ON
$2, 730
9
I N TE VA PRO D U CTS L L C H . W. K AU F MAN G RO U P I NC ./B UR NS & WI L COX LTD.
$2, 70 0
10
$32, 0 0 0
$2, 867
$2, 40 0 SOURCE: CRAIN’S DETROIT BUSINESS, 2021
COMMUNITY INDICATORS
Comcast Business’ Lift Zones provide free Wi-Fi hotspot connectivity inside community centers and access to hundreds of hours of digital skills content to help families and site coordinators navigate online learning.
CONSUMER SPENDING Service Sector Suffered, Spending on Goods Increased Through COVID-19 Pandemic
C O N S U M E R S P E N D I N G , U N I T E D S TAT E S Pe r c e n t C h a n g e , SA A R , 2 019 : Q 4 = 0
10% Change in Goods
Pandemic-related business closures hurt the services sector. In typical downturns, goods-producing sectors of the economy experience deeper job losses. However, national spending on goods has seen an increase compared to the fourth quarter of 2019, while spending has been curtailed in the services sector.
6.7%
Change in Ser vices
5% 0% -5% -6.5%
Despite significant expected revenues losses over the fiscal year, the state of Michigan’s revenue-estimating for 2020 resulted in a better-thanexpected tax collection, in part due to the increased spending on taxable durable goods, as opposed to less taxed services sectors which have experienced spending declines.
-10% -15% -20%
2019 Q4
SOURCE: BUREAU OF ECONOMIC ANALYSIS
2020 Q1
2020 Q2
2020 Q3
13
CONSUMER SPENDING, REGIONAL Arts, Entertainment, Recreation, and Transportation Experienced 60% Decrease in Spending
ALL MERCHANTS
Spending changes in the Detroit Region varied through 2020. Spending decreases grew in severity as industries that required in-person interactions closed or saw a reduction in customers. Arts, entertainment, and recreation, along with transportation, were down more than 60% by the end of 2020 compared to January 2020. In the Detroit Region, total consumer spending remained down 18% by the end of the year.
The K-shaped recovery has been visible through COVID-19’s effect on consumer spending and finances for the Region and state’s residents. While some individuals have remained comfortable in their finances with little impact, others have experienced severe impacts on their spending and financial situation. This divergence has continued long-standing inequities with groups of people thriving and others struggling. SOURCE: OPPORTUNITY INSIGHTS, DATA THROUGH DEC. 26, 2020
SPENDING INSECURITY
The Detroit Regional Chamber conducted statewide polls of registered voters in Michigan that provided insight and data on how Michiganders have reacted to the ongoing dual public health and economic crises. Respondents described COVID-19’s impact on their household finances in surveys in May and December 2020. At the end of 2020–as consistent throughout the year–one in four voters continued to deal with “catastrophic” or “major effects” on their household finances. This is in comparison to the three-quarters of Michigan voters who indicated “minor” or “no effect.” Poll results showed household finances were more impacted by COVID-19 for women, those with less educational attainment, and Black respondents.
MAY 2020 23.8% 74.0%
“Catastrophic” or “Major” Effect “Minor” or “No” Effect
DEC. 2020 24.2% 75.2%
“Catastrophic” or “Major” Effect “Minor” or “No” Effect
14
COMMUNITY INDICATORS INDEX OF CONSUMER SENTIMENT
CONSUMER SENTIMENT
United States
Despite the Pandemic, Consumer Sentiment Remains Resilient Overall consumer sentiment averaged 81.5 in 2020, showing small variations since April, well below the 97.0 average seen from 2017 to 2019. Despite the sudden historic collapse in economic activity, the level of key confidence indicators remains well above that of the Great Recession, which experienced a low of 55.3 in December 2008. Factors such as remote work, social distancing, and mask wearing have absorbed some of the pandemic’s negative impact on the economy, therefore consumers have remained more confident compared to previous recessions.
GREAT RECESSION
COMPARISON
120
101.1 10 0
80.1 80 71.8
CONSUMER SENTIMENT, U.S. Dec. 2008:
April 2020:
55.3
80.7
60
SOURCE: UNIVERSITY OF MICHIGAN
The way in which residents are experiencing the effects of the pandemic has varied from increased housing market demand and driving prices up to housing insecurity. As housing prices have increased and new home construction permits have remained strong into 2020, conversely there are increases in the share of the Detroit Region’s residents that have expressed concerns with their ability paying rent or mortgages.
M E D I A N S A L E P R I C E E X I S T I N G S I N G L E - FA M I LY H O M E S Not Seasonally Adjusted 350
HOME PRICES
$314
30 0
$291 $275
Low Mortgage Rates, Growing Home Prices Rise in Detroit Region Despite Pandemic
250
$236 $215
20 0
Housing market activity has been strong as the economy reopened and buyers took advantage of record-low mortgage rates. Median sale prices of homes in the Detroit Region grew 23.3% from the $192,600 in the first quarter of 2020 to $236,300 in 2020 Q3. The third quarter median sale price rose 13.7% in 2020 compared to the same quarter in 2019. This rate exceeded the national year-over-year quarter growth rate of 12.0%.
$275
$262
$196
$192
$183
150
10 0
50
0 2018
2019
2020 Q1
United St ates SOURCE: NATIONAL ASSOCIATION OF REALTORS®
2020 Q2
Detroit MSA
2020 Q3
15
B U I L D I N G A C T I V I T Y, D E T R O I T M S A
HOUSING PERMITS
N e w P r i v a t e l y O w n e d H o u s i n g U n i t s Au t h o r i z e d 8,0 0 0
New Home Construction in the Detroit Region Remained Resilient Through 2020
7,0 0 0
Preliminary reports indicate a similar number of units of single-family home starts in 2020 as compared to the previous year. Multi-family unit starts in the Detroit Region—down 21% over 2019—are often more unstable year-to-year.
6,0 0 0
6,838 6,131 5,711 5,193
5,0 0 0
5,191
4,0 0 0 3,251
3,0 0 0 2,0 0 0
2,620 2,053
1,948
1,032
1,0 0 0 0 2016
2017
2018
Single Family SOURCE: U.S. CENSUS BUREAU, BUILDING PERMITS SURVEY
2019
2020p
Multi Family NOTE: DATA FOR 2020 IS PRELIMINARY
HOUSING INSECURITY COVID-19 Increased Housing Insecurity in Detroit Region Despite activity in the housing market in the Detroit Region remaining strong, housing insecurity for many of the Region’s residents has grown. U.S. Census survey data revealed 37% of the Region’s households surveyed in mid-December expressed they are not current on rent or mortgage and in households where eviction or foreclosure in the next two months is either very likely or somewhat likely. Rates match that of the national survey responses.
HOUSING INSECURITY Percentage of adults who are not current on rent or mortgage payments, or who have “slight” or “no confidence” that their household can pay next month’s rent or mortgage on time
LIKELIHOOD OF EVICTION OR FORECLOSURE Percentage of adults living in households not current on rent or mortgage where eviction or foreclosure in the next two months is either “very likely” or “somewhat likely”
U.S.
DETROIT MSA
U.S.
DETROIT MSA
10%
10%
36%
37%
Source: U.S. Census Bureau, Household Pulse Survey, weeks surveyed Dec. 9-21, 2020 Note: Percentages are based on reporting distributions and do not include the populations that did not report to specific items.
16
COMMUNITY INDICATORS Below are key education indicators with the most prominent impact on the regional economy. A full detailed report on key data indicators that illustrate how the Region’s education institutions are preparing students for college and the jobs of the future can be found in the Detroit Regional Chamber’s 2021 State of Education Report, available at www.detroitchamber.com/soe.
EDUCATION ATTAINMENT
E D U C AT I O N AT TA I N M E N T G R O W T H Associate Degree or Higher 60% Boston
Gaps in Attainment Evident in COVID-19-Related Job Loss The Detroit Region’s share of the population with an associate degree or higher has continued to rise over the past five years, despite still lagging behind peer regions and the national average. The region’s educational attainment rate of 41.3%, remains a challenge as those with a high school diploma or no postsecondary credential are experiencing the greatest loss in work amid the COVID-19 pandemic. The Chamber’s State of Education Report provides an in-depth look at the access, success, and attainment of the Region’s talent, particularly in light of the events of 2020.
56.1%
55%
50%
45%
United St ates
41.7% Detroit
40%
41.3%
35%
30% 2014
POSTSECONDARY ENROLLMENT National, State Postsecondary Enrollment Down Amid Pandemic
2015
2016
Boston
Minneapolis
Seattle
St. Louis
Dallas
United St ates
2017
2018
Atlant a
Chicago
Detroit
Cleveland
2019
Pittsburgh
SOURCE: U.S. CENSUS AMERICAN COMMUNITY SURVEY ONE-YEAR ESTIMATES
Nationally, fewer high school graduates are enrolling in college. There was a nearly 22% drop in fall of 2020 over the previous year’s enrollment. Further, Michigan Free Application for Federal Student Aid (FAFSA) completions are down 16% year-over-year for the 2020-21 academic year as of Dec. 25, 2020. While 51% of Detroit Region students completed their FAFSA in the 2019-2020 academic year, over 23,000 did not complete the form. This enrollment drop and lack of access of financial resources will will significantly impact future talent recruitment. Michigan’s postsecondary institutions have seen enrollment drops in the 2020-21 academic year by 8.6% overall, with community colleges experiencing the largest declines. The Detroit Promise, a tuition-free path to postsecondary credential for Detroit residents, saw a 36% drop in community college enrollment in fall of 2020.
All Institutions
8.6% Enrollment of new Detroit Promise community college students Fall of 2020
Enrollment for Fall 2020 (compared to a 2.9% drop the year previous)
Public Two-Year
13.2% Enrollment for Fall 2020
Public Four-Year
6.1% Enrollment for Fall 2020
SOURCE: NATIONAL STUDENT CLEARINGHOUSE, MICHIGAN COLLEGE ACCESS NETWORK
INDUSTRY INDICATORS JOBJLOSS O B LO SBY S BYINDUSTRY, I N D U S T RY, DDETROIT E T R O I T M SMSA A
As some industries in the Region have seen relatively low job losses, others such as Leisure and Hospitality have recorded over 42% job losses over the year. Black and African American workers in the Detroit Region have higher shares of workers in service occupations prevalent in the hospitality industry, which have lower median wages and are experiencing higher job losses than those in industries with higher wages and the ability to work remotely.
JOB LOSSES BY INDUSTRY
in Nonfarm Payroll,12 Months, Not Seasonally Adjusted % C% h a Change nge in N o n f a r m Pa y r o l l , 12 M o n t h s , N o t S e a s o n a l l y A d j u s t e d Trade, Transport ation, and Utilities
-1.7%
Mining , Logging , and Construction
-2.0% -2.8%
Financial Activities
Leisure, Hospitality Sectors See Highest Job Loss During Pandemic In the Detroit Region, total nonfarm payroll employment declined by 188,700 or, 9%, from January 2020 to December 2020. Industries hardest-hit by COVID-19-related job loss: • • • •
Leisure and hospitality (-81,000) Education and health services (-39,900) Manufacturing (-23,500) Professional and business services (-20,200)
Information
-3.1%
Other Ser vices
-3.1%
Government
-5.1%
Professional and Business Ser vices
-5.2% -9.1%
Manufacturing Education and Health Ser vices Leisure and Hospit alit y
-12.4% -42.1% -9.3%
Total NonFarm
-50% SOURCE: BUREAU OF LABOR STATISTICS
-45%
-40%
-35%
-30%
-25%
-20%
-15%
-10%
-5%
0%
NOTE: DECEMBER 2020 IS PRELIMINARY
18
INDUSTRY INDICATORS
MANUFACTURING PMI®
M A N U FA C T U R I N G P M I ® United States
70%
Spring 2020 Decline Ended 131 Consecutive Months of Manufacturing PMI® Growth
60.5%
60%
Widely seen as a leading business indicator, the Manufacturing PMI® (Purchasing Managers’ Index) signals if the manufacturing economy is expanding. A Manufacturing PMI® above 42.8% over a period of time generally indicates an expansion of the overall economy. In 2020, the Manufacturing PMI® contracted in March, April, and May, which ended a period of 131 consecutive months of growth. However, manufacturing output stabilized as production facilities reopened amid the pandemic. Following reopening, the manufacturing economy continued to recover with eight consecutive months of growth.
50.3%
50%
30%
PPP LOANS PER CAPITA
41.7%
40%
Feb. 2020
March 2020
April 2020
May 2020
June 2020
July 2020
Aug . 2020
Sept. 2020
Oct. 2020
Nov. 2020
Dec. 2020
SOURCE: INSTITUTE OF SUPPLY MANAGEMENT®
SOURCE: BUREAU OF LABOR STATISTICS
P P P LOA N S P E R C A P I TA
The CARES Act created the Paycheck Protection Program (PPP) to provide a direct incentive for small businesses, which had to shut down or limit operations during the pandemic, with payroll and other expenses.
R o u n d 1. A p p r o v a l s t h r o u g h Au g . 8 , 2 0 2 0 <1,30 0
1,30 0 -1,599
1,60 0 - 1,899
>1,90 0
PPP Round 1 Approvals through Aug. 8, 2020 included 5.2 million loans totaling $525 billion nationally. Round 2 of funding was approved in December through the $900 billion COVID-19 Stimulus Bill, which included $284 billion for PPP loans. By state: • •
Michigan received $16 billion through 128,000 loans; ranked ninth Michigan received $1,606 per-capita in loans; ranked 30th
By industry: •
Health care and social assistance received the largest loan amounts nationally, $67.8 billion; 532,000 loans, nearly 13% of total loans distributed
•
The accommodation and food services sector continuously had one of the highest unemployment rates in 2020 but only received 8% of total loans distributed
NOTE: SBA’s PPP LOAN APPROVALS THROUGH 08/08/2020
SOURCE: U.S. SMALL BUSINESS ADMINISTRATION, U.S. CENSUS BUREAU (2019), POPULATION ESTIMATE JULY 1, 2019 (V2019)
19
The number of small businesses that have remained closed over the past year remains high, while the third quarter of 2020 saw Michigan’s new business applications rise significantly, within months of reopening measures and economic low points of the recession.
SMALL BUSINESSES OPEN AND REVENUE Detroit Region’s Small Businesses Hurt More Than Nation by COVID-19 Restrictions, Consumer Changes Following COVID-19-related shutdowns at the end of March compared to January 2020: • •
Detroit Region small business revenue dropped by 57.1% compared to the U.S. decrease of 49.4% Detroit Region number of small businesses open decreased by 54.7% compared to the U.S. decrease of 43.7%
Percent age Change
10% 0% -10% -32.6%
-20% -30% -40%
-39.2%
-50%
-54.7% -57.1%
-60%
As of December 2020: •
SMALL BUSINESS OPEN AND REVENUE, DETROIT MSA
SMALL BUSINESS OPEN DETROIT MSA Pe r cAND e n t a g e REVENUE, Change
Small businesses open decreased by 32.6% compared to January 2020 and revenue decreased by 39.2% compared to January 2020
Jan. 2020
Feb. 2020
March 2020
April 2020
60 0,0 0 0
In Q3 of 2020, Michigan business applications totaled to 54,547, a 134% increase over Q3 2019. The growth sharply contrasts the smaller increase in business application in prior years, and the 0.03% decline from 2018 to 2019.
40 0,0 0 0
COMPARISON
-3.9
2019 to 2020: %
+42.2
Sept. 2020
Oct. 2020
Nov. 2020
Dec. 2020
50 0,0 0 0
30 0,0 0 0 20 0,0 0 0 10 0,0 0 0 0
NEW BUSINESS APPLICATIONS, MICHIGAN 2008 to 2009: %
Aug . 2020
To t a l , S e a s o n a l l y A d j u s t e d
Michigan business applications totaled 133,247 for 2020, a 42.2% increase over 2019. More than 39,500 additional applications have been filed in 2020 compared to 2019.
GREAT RECESSION
July 2020
N E W B U S I N E S S A P P L I C AT I O N S , M I C H I G A N
Michigan’s New Business Applications Up Year Over Year
-
June 2020
NOTE: SMALL BUSINESSES OPEN, AS DEFINED BY HAVING HAD AT LEAST ONE TRANSACTION IN THE PREVIOUS 3 DAYS. SMALL BUSINESS REVENUE TRANSACTIONS AND REVENUE DATA AGGREGATED FROM CREDIT CARD PROCESSORS.
SOURCE: OPPORTUNITY INSIGHTS
NEW BUSINESS APPLICATIONS
New business application growth after a recession is a leading indicator of recovery, and often observed after times of economic hardship. The slow recovery in the years following the Great Recession was unique, as new business applications decreased 3.9% from 2008-2009, increased 3.5% from 2009-2010, and continued with three years of annual decreases.
May 2020
SOURCE: U.S. CENSUS BUREAU
Q1 2019
Q2 2019
Q3 2019
Q4 2019
Q1 2020
Q2 2020
Q3 2020
Q4 2020
20
INDUSTRY INDICATORS
OFFICE AND INDUSTRIAL VACANCY RATES Real Estate Demand Less Resilient Than Other Sectors in Wake of COVID-19 Due to COVID-19, consumers have shifted from brick-and-mortar retail to e-commerce, and more employees are working from home. In 2020, the Region’s office vacancy rate increased to 10.9%, and industrial vacancy rates increased 0.5 percentage points to 4.4%. Vacancy rates in 2020 remain well below those seen during the Great Recession, with office rates at 10.9% versus 19.2% in 2010 and industrial rates at 4.4% versus 14.2% in 2010. Continued uncertainty surrounding the trajectory of COVID-19 will likely lead real estate demand to remain negative through 2021. Impacts on commercial real estate have yet to be fully determined in part due to long-term lease structures, however early indications show increasing levels of sublease office space in the Region.
O F F I C E A N D I N D U S T R I A L VA C A N CY R AT E S , D E T R O I T M A R K E T 14% 12%
12.0% 10.9%
10.8% 9.9%
10%
9.8%
8% 6% 4.1%
4%
4.1%
4.0%
4.4%
3.9%
4.4%
2% 0%
2016
2017
2018
2019
2020
Industrial
Office SOURCE: CoSTAR
AV E R A G E DA I LY T R A F F I C VO L U M E , D E T R O I T R E G I O N Pe r c e n t C h a n g e Fr o m P r e v i o u s Ye a r
AVERAGE DAILY TRAFFIC VOLUME COVID-19 Drives Average Daily Traffic Volume Decrease of 19.8% from 2019 in Detroit Tri-County Area
10%
3.4%
0% -10%
According to Michigan Department of Transportation (MDOT), daily traffic volumes are measured by the total number of motor vehicles that cross traffic sensors in each MDOT Region. MDOT’s Metro Region is made up of Oakland, Macomb, and Wayne counties. Traffic volume decreased significantly in March, April, and May, during stay-at-home orders to slow the spread of COVID-19. In April 2020, average vehicles on the road decreased more than 59.2% from 1.6 million the previous year to 688,245.
-30% -40% -50% -59.2%
-60% -70%
In 2020, the average monthly traffic volume has decreased by 19.8% compared to 2019.
-19.8%
-20%
Jan. 2020
Feb. 2020
March 2020
SOURCE: MICHIGAN DEPARTMENT OF TRANSPORATION
April 2020
May 2020
June 2020
July 2020
Aug . 2020
Sept. 2020
Oct. 2020
Nov. 2020
Dec. 2020
21
NATIONAL AIRPORT TRAVELERS
A I R P O R T T R AV E L E R S , U N I T E D S TAT E S
AIRPORT TRAVELERS, UNITED STATES
National Airport Travelers Down More Than 70% Compared to 2019 Airports have experienced the most drastic change in travel traffic. Since March 2020, the total travelers scanned by the Transportation Security Administration (TSA) decreased by 72.3% compared to 2019. Travelers reached 200.7 million from March 2020 to the end of December compared to more than 723.3 million in 2019 during the same period.
120,0 0 0,0 0 0
2020
2019
10 0,0 0 0,0 0 0 80,0 0 0,0 0 0 60,0 0 0,0 0 0
It’s likely that we’ll experience two distinct phases during the next 12 months. The first will look a lot like 2020, with travel demand deeply depressed and our focus on ensuring the health and safety of our people and customers. The second phase will begin only when we reach a turning point with widely available vaccinations that spur a significant return to travel, particularly business travel.”
Ed Bastian
Chief Executive Officer, Delta Air Lines
40,0 0 0,0 0 0 40 0 0 350 30 0 0 250 20 0 150 10 00 50 0
20,0 0 0,0 0 0 0
Detroit Metropolitan Wayne County Airport (DTW) is Michigan’s largest airport and employs more than 86,000 individuals with an annual economic impact of $10.2 billion. In 2019, passenger traffic at DTW reached a record high of 36.7 million. Since the start of the pandemic, DTW’s total passengers decreased as low as 94% in April 2020 compared to April 2019. In 2020, DTW served a total of 14,077,027 passengers—a 61% decrease compared to 2019.
April 2020
May 2020
June 2020
July 2020
Aug . 2020
Sept. 2020
Oct. 2020
Nov. 2020
Dec. 2020
SOURCE: TRANSPORTATION SECURITY ADMINISTRATION
DETROIT METRO AIRPORT PASSENGERS Since the Pandemic, DTW Passengers Down as Low as 94% Compared to 2019
Mar. 2020
D E T R O I T M E T R O P O L I TA N WAY N E C O U N T Y A I R P O R T PA S S E N G E R S 4,0 0 0,0 0 0 3,50 0,0 0 0 3,0 0 0,0 0 0
3,040,796
+20.3% 2,676,886
+10.1%
2,50 0,0 0 0 2,0 0 0,0 0 0
2,224,626
-52.1% -64.1%
1,50 0,0 0 0 -73.7%
1,0 0 0,0 0 0
-67.4%
Aug . 2020
Sept. 2020
-63.3%
1,092,991
-82.5%
50 0,0 0 0 0
-64.5%
-68.2%
-90.9%
-94.2% 178,094
Jan. 2020
Feb. 2020
SOURCE: WAYNE COUNTY AIRPORT AUTHORITY
March 2020
April 2020
May 2020
June 2020
July 2020
2020
2019
Oct. 2020
Nov. 2020
Dec. 2020
22
INDUSTRY INDICATORS PUBLIC TRANSIT RIDERSHIP ALL MODES, DETROIT REGION
PUBLIC TRANSPORTATION RIDERSHIP Public Transit Ridership Saw Steep Pandemic-Related Declines in 2020 Due to decreased demands and initiatives to reduce the spread of COVID-19, agencies across the region have had substantial service changes. The Detroit Region saw the largest drop in public transit use during April 2020—an 82.5% change in ridership compared to April 2019. Through November 2020, public transit ridership was down 55.0% compared to 2019, with nearly 23 million fewer riders in 2020 than 2019.
Ye a r- O v e r- Ye a r C h a n g e i n R i d e r s h i p 20%
15% 9%
0% -20% -40%
-38%
-60% -69%
-80%
Downtown Detroit’s QLINE halted operations in March 2020, and announced operations to restart in late summer 2021.
-69%
-65%
-65%
-65% -71%
-75% -83%
-100% Jan. 2020
Feb. 2020
March 2020
April 2020
May 2020
June 2020
July 2020
Aug . 2020
Sept. 2020
Oct. 2020
Nov. 2020
SOURCE: NATIONAL TRANSIT DATABASE
HOTEL OCCUPANCY 2020 Worst Year on Record for Hotel Industry with Halted Business, Recreational Travel Due to COVID-19
H OT E L O C C U PA N CY R AT E Pe r c e n t C h a n g e Fr o m P r e v i o u s Ye a r 10% 0%
According to a report released by STR Inc., the industry surpassed 1 billion unsold rooms for the first time in history, surpassing the 786 million unsold rooms during 2009’s global financial crisis. STR predicts 2020 profits will be close to zero. In the Detroit Region, the steepest occupancy rate decline was in April 2020—a year-over-year decline of 61.7%. During the summer months, demand for hotel rooms increased. The Region’s hotel occupancy rates for December 2020 ended the year at 35.5% below the same month in 2019, exceeding the national decrease of 32.3%.
-10% -20% -30%
-32.3% -35.5%
-40% -50% -60% -70%
-61.7%
Jan.
Feb.
March
-63.9%
April
May
June
July
Aug .
Detroit Region SOURCE: STR
Sept.
Oct.
United St ates
Nov.
Dec.
23
INDUSTRY SPOTLIGHTS:
AUTOMOTIVE
AND MOBILITY
suppliers to North America have a presence or headquarters in Michigan
Original Equipment Manufacturers (OEM) in Michigan
contribution to Michigan’s economy annually
universities and colleges in Michigan with nationally ranked undergraduate engineering programs, four of which also have nationally ranked graduate programs
jobs in Michigan
engineering, R&D, testing, and validation facilities in Michigan
24
INDUSTRY SPOTLIGHT: AUTOMOTIVE AND MOBILITY A N N UA L U. S . L I G H T W E I G H T V E H I C L E S A L E S
U.S. LIGHT VEHICLE SALES
S e a s o n a l l y A d j u s t e d A n n u a l R a t e ( SA A R ) 20.0
Despite Declines at the Onset of the COVID-19 Crisis, Light Vehicle Sales Continued to Rebound Through the End of 2020 At the beginning of 2020, U.S. Light Vehicle Sales were projected to reach levels above 16 million. The annualized rate dropped as low as 8.7 million in April 2020, as manufacturing shut down operations. Resilience in the retail market resulted in much better sales performance than expected, with the total U.S. Light Vehicle Sales reaching 14.6 million in 2020 compared to 17.1 million in 2019, a drop of 14.4% annually. Improving consumer confidence, along with interest and ability to buy vehicles, has kept the vehicle market on a strong path to recovery. Fleet sales have shown to be more challenged, as rental companies have delayed fleet purchasing while travel remains at low levels.
GREAT RECESSION
COMPARISON
16.8
16.3
15.0
10.0 8.7
5.0
Jan. 2019
Feb. March April 2019 2019 2019
May 2019
June 2019
July 2019
Aug . 2019
Sept. 2019
Oct. 2019
Nov. 2019
Dec. 2019
Jan. 2020
Feb. March April 2020 2020 2020
May 2020
June 2020
July 2020
Aug . 2020
Sept. 2020
Oct. 2020
Nov. 2020
Dec. 2020
U.S. Light Vehicle Sales 2009
2020
2021 Forecast
10.4 M
14.6 M
15 M+
SOURCE: U.S. BUREAU OF ECONOMIC ANALYSIS
N O R T H A M E R I C A N C A R A N D L I G H T- T R U C K P R O D U C T I O N
NORTH AMERICAN CAR AND TRUCK PRODUCTION
1,200,000
1,000,000
North American Car and Truck Production Returned to Pre-COVID-19 Levels Following Industry’s Reopen North American car and truck production was steady from January 2019 to March 2020, averaging 1.3 million monthly. Total production dramatically decreased to 4,840 in April 2020 due to COVID-19 restrictions and shutdowns. Since reopening in mid-May 2020, production returned to preCOVID-19 levels with total vehicle production reaching over 1.4 million in October 2020, the highest total since August 2019.
800,000
600,000
400,000
200,000
0
Jan. 2019
Feb. March April 2019 2019 2019
May 2019
June July 2019 2019
Aug . Sept. Oct. 2019 2019 2019
Nov. 2019
Dec. Jan. Feb. March April May 2019 2020 2020 2020 2020 2020
Truck Production SOURCE: AUTOMOTIVE NEWS
June July 2020 2020
Car Production
Aug . Sept. Oct. Nov. 2020 2020 2020 2020
Dec. 2020
25
MOBILITY FOOTPRINT Testing and Validation Centers
Deployments and
Pilot Projects
No. 1 for U.S. DOT-funded operational connected vehicle deployments
Industry 4.0
Cybersecurity 13 sites and hubs operated by Michigan Cyber Range
9th in the U.S. for Cybersecurity Leader
1st international border crossing by U.S. Army/ TARDEC and MDOT truck platooning test
Robotics 28,000 industrial robots, more than any other state
115 deployments – technology activations on Michigan roads either currently active, in process, or completed
University of Michigan Ford Robotics Facility Macomb County Robotics Innovation and Collaboration Center
SOURCE: MICHIGAN ECONOMIC DEVELOPMENT CORP., BROOKINGS INSTITUTE, BUSINESS FACILITIES, U.S. DEPARTMENT OF TRANSPORTATION
26
INDUSTRY SPOTLIGHT: AUTOMOTIVE AND MOBILITY C AS E S T U DY:
MANUFACTURING MOBILIZES TO SUPPORT PPE NEEDS In the wake of rising COVID-19 cases, the automotive sector shifted to provide and produce urgently needed personal protection equipment for health care workers in early 2020. Companies industry-wide pivoted to support timely needs through donations and participation in the Arsenal of Health. Examples include:
provided 11,000 masks to hospitals, police, and the community
provided 3,600 units of PPE to the City of Detroit
Partnered with GE to produce 50,000 breathing machines for the U.S. government
Participated with Michigan Department of Health and Human Services and FEMA in MI Mask Aid program to provide 4 million free masks to Michiganders
Partnered with Ventec Life Systems to produce 30,000 ventilators to the U.S. Department of Health and Human Services
To assist medical workers in local communities, Nexteer used 3D printers in Saginaw, MI to produce face masks and shield components.
Completed federal order for ventilators in 154 days, with one ventilator completed about every seven minutes
Produced 11 million protective masks
Donated 13,800 masks to Detroit Medical Center and City of Detroit
Provided supply chain sourcing solutions
Worked with Pure Michigan Business Connect to facilitate the purchasing process of 250,000 face shields for the State of Michigan
Produced more than 36,000 masks and more than 31,000 mask inserts total in spring of 2020
Donated 25,000 masks to be distributed via Michigan Health Improvement Alliance, Inc. (MiHIA)
INDUSTRY SPOTLIGHTS:
AEROSPACE AND DEFENSE
GM Defense, LLC, was selected by the U.S. Army to produce the Infantry Squad Vehicle to motorize Infantry Brigade Combat Teams. The ISV program provides IBCTs an additive lightweight vehicle to move soldiers and their equipment quickly over complex and difficult cross-country terrain. Credit: Michael J. Malik; U.S. Army
Michigan’s defense industry contributed $31 billion in overall economic activity in 2019 through 155,000 defense related jobs and 17 commands and installations throughout the state. The Defense Corridor in Macomb County is home to 23 R&D labs and testing facilities, more than 600 defense-contracting businesses, and the Detroit Arsenal. The Detroit Region’s commitment and expertise in providing vehicles, equipment, and services to the nation’s armed forces is led by Selfridge Air National Guard Base and the United States Army Ground Vehicle Systems Center at the Detroit Arsenal.
employees in the Detroit Region
Michigan Unmanned Aerial Systems Consortium (MUASC) in Alpena, Michigan provides
of airspace for R&D certification, qualification, and systems testing for commercial unmanned aerial systems
in defense contracts in the Detroit Region
for aerospace manufacturing attractiveness in Michigan SOURCE: MICHIGAN DEFENSE CENTER, EMSI, USASPENDING.GOV, PwC
28
INDUSTRY SPOTLIGHT: AEROSPACE AND DEFENSE
DEFENSE CONTRACTS - AMOUNT OBLIGATED
DEPARTMENT D E PA R T M E N TOF O FDEFENSE D E F E N S ESPENDING, S P E N D I N GDETROIT , D E T R O IREGION T REGION $4,000,000,000
The Detroit Region’s defense footprint significantly increased from 2015 to 2019, with a $1.9 billion growth in defense contracts. There was a $600 million decrease between 2019 to 2020. Top Defense Contract Spending Locations (2019) • Macomb $3.5B • Oakland $243.1M • Wayne $216.9M
$3.8 B
$3.9 B
$3,500,000,000 $3.3 B
$3,000,000,000 $2,500,000,000 $2,000,000,000
$2.5 B $2.2 B $1.9 B
$1,500,000,000 $1,000,000,000 $500,000,000 $0
DETROIT ARSENAL / DEFENSE CORRIDOR 178 acres, 67 buildings, and 200 million square feet of building space
Only active-duty military installation in Michigan
Home to the Next Generation Combat Vehicle Cross Functional Team (NGCV CFT)
Serves 250 military and 7,500 Department of Defense civilian and contract workers
70% of Army purchases contracted through Army Contracting Command Detroit Arsenal
FY 2015
FY 2016
FY 2017
FY 2018
FY 2019
FY 2020
SOURCE: USASPENDING.GOV
GM DEFENSE LLC TO PRODUCE INFANTRY SQUAD VEHICLE (ISV) The ISV modernization project contract is valued at $2.14 million. The ISV program provides Infantry Brigade Combat Teams an additive lightweight vehicle to better move soldiers and equipment over complex terrain. This is the second key production contract award for Army light tactical wheeled vehicle modernization programs of record in the last year. The Joint Light Tactical Vehicle contract is also modernizing the Army’s and U.S. Marine Corps’ LTV fleets.
U.S. ARMY PROGRAM EXECUTIVE OFFICE FOR COMBAT SERVICE & COMBAT SERVICE SUPPORT (PEO CS&CSS) PEO CS&CSS’s acquisition activities account for nearly 20% of the Army’s total equipment programs and fielded 26,293 systems in FY20. It also created a task force addressing PEO-wide COVID-19 issues, quickly converting to nearly 100% telework, adjusting policies, tools, and processes to enable nearly-unaffected mission continuity.
29
MICHIGAN DEFENSE CENTER State office tasked to protect and grow Michigan’s defense, defense aerospace, and homeland security missions and industries. The Bid Targeting System, developed for Michigan companies, provides business intelligence support to 37,000 companies to help better assess which of the 17,000 contracting opportunities to pursue, as well as keep track of the status of current and past bids.
COVID-19: OPERATION WARP SPEED Since March 16, 2020, more than 1,100 service members from the Michigan National Guard and Joint Task Force Michigan have conducted COVID-19 response missions in all 83 counties, including:
Establishing two Alternate Care Facilities to add 2,000 bed capacity in the Metro Detroit area, including TCF Center.
Performing more than 215,000 COVID-19 tests to date at MDOC correctional facilities, county jails, long-term care facilities, and dozens of drive-thru locations.
Supporting the Michigan Department of Health and Human Services to support community health care organizations administer almost 80,000 COVID-19 vaccinations across the state (as of Feb. 9, 2021).
30
INDUSTRY SPOTLIGHT: AEROSPACE AND DEFENSE C AS E S T U D I E S :
PRATT MILLER AND QINETIQ DELIVER FIRST ROBOTIC COMBAT VEHICLE TO U.S. ARMY In 2020, New Hudson-based Pratt Miller Defense and QinetiQ Inc. delivered the first robotic combat-light vehicle to the U.S. Army Combat Capabilities Development Command Ground Vehicle Systems Center. This vehicle was the first of four robotic autonomous combat vehicles to be delivered to the Army in 2020. “By building upon years of development, testing, and experimentation with the United States Marine Corps, we were able to provide the Army with a mature, lowrisk system that exceeds the objective level speed, maneuverability, and payload requirements in a single system configuration,” said Brian Barr, product manager for Pratt Miller. “The EMAV platform’s modular flat deck architecture has been integrated with over 20 payloads and exemplifies the flexibility required to address current and future threats.” This vehicle is a hybrid-electric unmanned ground combat vehicle that combines Pratt Miller’s modular autonomous vehicle technology with QinetiQ’s robotic control systems.
FROM AEROSPACE PROTOTYPES TO MEDICAL ESSENTIALS, 3-DIMENSIONAL SERVICES SHIFTS TO SUPPORT PPE PRODUCTION THROUGH COVID-19 In the spring of 2020, the Rochester Hills-based 3-Dimensional Services Group transitioned from their standard manufacturing to assist in the production of essential COVID-19 medical supplies, including face shields and protective respirator housings for mobile respirator machines. The company worked through the entirety of the manufacturing shutdown to produce essential medical, aerospace, transportation, and defense industrial products. The 3-Dimensional Services Group focuses on building custom tooling and molds, which made the transition to producing personal protective equipment nearly seamless. They produced more than 750,000 face shields and 100,000 respirator housings to be used across the country.
INDUSTRY SPOTLIGHTS:
H E A LT H
CARE
THE HEALTH CARE INDUSTRY IN THE DETROIT REGION: Has more than
largest metro for health care professionals
hospitals recognized as “nationally ranked” or “high performing,” many of which played vital roles in treating COVID-19 patients
in National Institute of Health funding
32
INDUSTRY SPOTLIGHT: HEALTH CARE
COVID-19 TRIALS AND STUDIES Across the state, 35 hospitals are contributing clinical data on COVID-19 patients into an extensive clinical registry, coordinated by the Michigan Hospital Medicine Safety Consortium. According to Blue Cross Blue Shield, the registry will help medical professionals understand why patients from different geographic, economic, and demographic boundaries have more severe illness or worse outcomes and what factors or treatments contribute to better outcomes.
Henry Ford Health System was chosen to be part of the Moderna Phase 3 vaccine trial: The Moderna COVE vaccine study. As one of 90 U.S. sites chosen and the only site in Michigan, the randomized, double-blind study measured the effectiveness of the vaccine in a total of 30,000 people across the country. Henry Ford Health System recruited 700 participants.
Beaumont Research Institute conducted one of the nation’s largest testing studies for COVID-19 antibodies, with results published in the journal Clinical Infectious Diseases. Key takeaways from the study include data on the statistical significance of the impact of mask wearing, who was at greater risk of contracting COVID-19, and likelihood of contracting the virus by level of exposure.
H E A LT H C A R E O C C U PAT I O N G R O W T H , D E T R O I T R E G I O N
OCCUPATION GROWTH, HEALTH CARE
105
Nurse Midwives
Demand for Mental Health Care During Pandemic Drove Psychiatric Technician Job Growth
Hearing Aid Specialists
162
Medical Appliance Technicians
Between 2015 and 2020, the Detroit Region’s fastest-growing occupation was dentistry, which more than doubled with a 259 job gain and a 124% increase, followed psychiatric technicians with a 1,470 job gain or 108% increase. Substance abuse, behavioral disorder, and mental health counselors gained 2,905 jobs by 2020, a 55% increase in the last five years.
Wayne State University’s School of Medicine is part of a nationwide Phase 3 clinical trial of the Novavax, Inc. COVID-19 vaccine, which does not use mRNA. Phase 3 of the trial will help scientists determine whether it’s effective at preventing infection, and the university is seeking 300 participants.
249
Dentists, All Other Specialists
259
Orthotists and Prosthetists
383
Health Information Technologists, Medical Registrars, Surgical Assistants, and Health Care Practitioners and Technical Workers
570
Occupational Health and Safet y Specialists
746
1,470
Psychiatric Technicians
Nurse Practitioners
1,730
Subst ance Abuse, Behavioral Disorder, and Ment al Health Counselors
2,905
0
2000 2015 Jobs
SOURCE: EMSI
4000
6000 Jobs Gained by 2020
8000
10000
33
UNIQUE JOB POSTINGS ‘Registered Nurse’ Was Top Job Posting in Detroit Region as COVID-19 Cases Rose
UNIQUE JOB REGION UN IQUE JO B P POSTINGS, O S T I N G S , DDETROIT ETROIT R E G I O N (DEC. ( D E C . 2019 2 01 9- -DEC. D E C2020) . 2020) Registered Nurses
7,510
Certified Nursing Assist ants Speech Language Pathologists
There was a total of 2,211,916 total health care related job postings between December 2019 and December 2020 in the Detroit Region, 436,637 of which were unique. As COVID-19 required more hospital staff to care for the increased number of patients, registered nurses represented 7,510 of the unique job postings. After registered nursed, the top job posting in the health care industry in the Detroit Region, was certified nursing assistants with 6,485 job postings.
Licensed Practical Nurses Pharmacy Technicians
ICU Registered Nurses
Caregivers
Physical Therapists Medical Surgical Registered Nurses Medical Assist ants
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
SOURCE: EMSI
HEALTH CARE TRENDS Telehealth Claims Peaked at More Than 525M as COVID-19 Spread In Michigan, medical and behavioral health telehealth services were rarely utilized prior to COVID-19, with no more than 9,640 telehealth claims per month between January 2019 and February 2020. In April 2020, as the pandemic started, total telehealth claims increased to 525,126– 245,444 for behavioral health, and 279,682 for medical. Additionally, according to Blue Cross Blue Shield of Michigan, early indications show a projected 10-15 percentage point drop in health maintenance exams in 2020 compared to 2019 in Michigan. Routine screenings are down, along with preventative care. For example, the commercial population of in-Michigan members controlling high blood pressure decreased over 6% in 2020 over 2019.
T E L E H E A LT H T R E N D S , M I C H I G A N 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0
Jan. 2019
Feb. March April 2019 2019 2019
May 2019
June 2019
July 2019
Behavioral Health (In-Person) SOURCE: BLUE CROSS BLUE SHIELD OF MICHIGAN
Aug . 2019
Sept. 2019
Oct. 2019
Nov. 2019
Dec. 2019
Jan. 2020
Feb. March April 2020 2020 2020
May 2020
Telehealth - Behavioral Health
June 2020
July 2020
Aug . 2020
Sept. 2020
Oct. 2020
Nov. 2020
Dec. 2020
Telehealth - Medical
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INDUSTRY SPOTLIGHT: HEALTH CARE
POPULATION STAYING AT HOME Mobility is an important indicator as it informs the extent people are moving around, which ultimately affects the spread of COVID-19. The data from Bureau of Transportation Statistics is an experimental dataset which uses anonymized cell phone data. Prior to COVID-19, the population staying home, making no trips daily more than one mile from home, was nearly the same as that of the previous year. During the statewide stay-at-home orders, the percentage of residents staying home peaked at almost 56% compared to the previous year, and at the end of 2020 there remained a 30% increase in the share of population staying home.
P O P U L AT I O N S TAY I N G AT H O M E , M I C H I G A N 60%
55.7%
50%
40% 29.8%
30%
20%
17.7%
10%
0%
Dec. 2019
Jan. 2020
Feb. 2020
March 2020
April 2020
May 2020
June 2020
July 2020
Aug . 2020
Sept. 2020
Oct. 2020
Nov. 2020
Dec. 2020
SOURCE: BUREAU OF TRANSPORTATION STATISTICS
CASE STUDIES:
COVID-19 AND THE MENTAL HEALTH CRISIS: NORTHEAST INTEGRATED HEALTH STEPS UP
THE DETROIT HEALTH DEPARTMENT: KEEPING DETROITERS SAFE DURING COVID-19
On April 6, 2020, Northeast Integrated Health (NIH) opened a Psychiatric Urgent Care Clinic to address increased mental health concerns created by the COVID-19 pandemic.
Early in 2020, initial supplies of rapid test kits were prioritized for first responders and frontline workers. Also, partnerships to test staff and residents of the City’s 26 nursing homes, combined with education for staff, resulted in a reduction in the infection rate, from 25% to less than 5%.
“People living with mental illness face additional challenges dealing with COVID-19 from managing anxiety, understanding social isolation to accessing healthcare and medications,” said Sherry McRill, president and chief executive officer of Northeast Integrated Health. “Opening an urgent care facility is an accessible alternative to meet the unique needs of individuals and decrease emergency room experiences and potential COVID-19 exposure.” This new facility provides critical services through the challenge of the COVID-19 pandemic, including crisis intervention, medication reviews, nursing assessments and injections, psychiatric evaluations, peer support, and non-ER transport.
The City also established a drive-through rapid test site for Detroiters and residents of the surrounding tri-county area and connected residents without primary care providers to physicians who could write prescriptions for tests. The Health Department worked with health care systems, community leaders, businesses, and schools to provide COVID-19 safety awareness and education, along with judicious enforcement to keep businesses and schools safe. The City also provided an up-todate online dashboard showing positivity, hospitalization, and fatality rates. “The Detroit Health Department is continuing its mission to protect the public health, providing clear, consistent messaging and information on how to keep safe from COVID-19,” said Denise Fair, chief public health officer of the Detroit Health Department. “We are committed to providing equal access to health care for all, so that Detroiters can thrive.”
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In its seventh year, the Detroit Regional Chamber’s 2021 State of the Region report is framed by the global COVID-19 pandemic’s impact on the Region and state during 2020. Despite this change, the report maintains its year-over-year data continuity with annual metrics through 2019. These key figures are included below as a regional benchmarking report card for the region, including metrics on the economy and community.
2019 Value
5Y Growth (2015-19)
5Y Growth Rank
YoY Growth
YoY Peer Ranking
2019 National Value
National YoY Growth
Source
$237.1 Billion
6.4%
#7
0.8%
#8
$19.1 Trillion
2.2%
U.S. Bureau of Economic Analysis
63.1%
1.9 p.p
#2
0.5 p.p
#3
63.6%
0.3 p.p
U.S. Census Bureau
1,849,300
6.5%
#5
1.2%
#5
128,346,000
0.3%
U.S. Bureau of Labor Statistics
$35,315
18.8%
#6
4.7%
#7
$35,671
5.4%
U.S. Census Bureau
7,813
7.0%
#5
9.1%
#2
1,386,048
12.7%
U.S. Census Bureau
4,319,629
0.6%
#6
-0.2%
#7
328,239,523
0.3%
U.S Census Bureau
Millennial Population
590,699
9.4%
#2
1.6%
#3
45,578,475
0.5%
U.S. Census Bureau
Median Home Value
$191,800
27.0%
#4
6.4%
#1
$240,500
4.7%
U.S. Census Bureau
Median Household Income
$63,474
18.4%
#5
4.9%
#7
$65,712
6.1%
U.S. Census Bureau
Poverty Rate, City of Detroit
30.6%
-9.2 p.p
#1
-2.8 p.p
#1
12.3%
-0.8 p.p
U.S. Census Bureau
41.3%
2.8 p.p
#9
1.6 p.p
#5
41.7%
2.1 p.p
U.S. Census Bureau
324,472
6.0%
#7
0.4%
#8
19,893,856
2.0%
EMSI
8,828
40.8%
#2
15.60%
#6
180,083
15.6%
U.S. Patent and Trademark Office
Exports by Metro
$41.1 Billion
-7.4%
#8
-6.9%
#8
$1.6 Trillion
-1.4%
International Trade Administration
Foreign Direct Investments, Michigan
$3.5 Billion
84.4%
N/A
235.6%
N/A
$95.1 Billion
26.3%
Financial Times FDImarkets.com
Metric Name ECONOMIC INDICATORS Real GDP Labor Force Participation Rate Private Sector Job Growth Per Capita Income Residential Contruction Permits
COMMUNITY Population
EDUCATION AND TALENT Educational Attainment1 Job Growth in STEM Occupations Patents Granted, Michigan
GLOBAL CONNECTIVITY
Note: Data benchmarked against peer Metropolitan Statistical Areas (MSA) use the six-county Detroit Region, which includes Lapeer, Livingston, Macomb, Oakland, St. Clair, and Wayne. The peer MSAs include Atlanta, Boston, Chicago, Cleveland, Dallas, Minneapolis, Pittsburgh, St. Louis, and Seattle. p.p. = percentage points 1. Includes percentage of population 25 years and over with an associate degree or higher