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The paper will analyze the current state of Michigan economy and give reasons for current state of the economy. Experts agree that the economy of Michigan has been low for years, but the state has witnessed a great recovery mainly after the Great Economic Recession. The discussion will provide an insight of the current performance of the economy and give recommendations on how to further the economic growth of the nation.
According to Bureau of Business Research 2002, the economy of Michigan has been improving in the last two years especially the auto industry. Based on this evidence, economists remain certain that Michigan economic status will continue to climb out of its deep economic hole. The economy has enjoyed an increasingly substantial economic recovery from the Great Recession for instance the GDP of the state has increased up to 385 dollar in 2011 compared 352 dollars of the last two years and this can be attributed to some key indicators. The per capita income of the nation has increased by 0.7% in the 3rd quarter of 2012 on a yearly basis, even thought this rise was lower compared to the 2rd quarter. Based on this evidence, the GDP of the nation is calculated to be increasing at a 0.8 percent compared to the previous years.
The figure below shows Michigan economic growth after the Great Recession
This extensive economic growth – as shown in the figure is assumed to be from manufacturing sector. For instance, manufacturing has a great contribution to the positive economic growth index especially the automobile industry. The other main contribution is from the construction sector that has made an enormous growth index change since 2005.
Other crucial indicators of Michigan’s economic growth include reduction in the unemployment rate from 9.2 percent to 8.7 percent between October and November. For instance, between 2011 and 2012, the nation has had substantial growth in private sector employment. This qualified Michigan to be among the top six rapidly growing world economies. The levels of employment in the nation have currently shown some improvement signs since the end of the Great Recession in 2009 (Barenblat, 25). For example, the nation’s household employment has risen to about 2.7% matching the national gain of the state. In addition, the greatest employment increased is evidence in some sectors such as education, health services, hospitality sector, leisure, logging in addition, mining sectors, with health sector adding up 1.7 million employment opportunities accounting for 50% of the job opportunities created since recession in 2008.
Similarly, the housing market has also show some minimal improvements that may viewed as economic improvement indicators and the United States sales of light vehicles has been very strong in December, assisting in boosting the production of Michigan light motor vehicles in 2012. For instance, statistics shows that housing markets are stabilizing with rise in sales and prices. Although, new homes constructions remain minimal, they are expected to rise and meet the gap demand.
The business climate of the nation and the economy have enhanced during the past few years although the change has not been stronger to push the nation in the top ten economically strong nations. Following the reduction of business taxation and shift of corporate tax, the business condition of the Michigan has shifted to be among the top seven best economies of the world. Economists report that the GDP per capita and employment rates of Michigan has increased substantially compared to their peer nations since 2008-9.
A firm competitive business climate in Michigan in conjunction with innovative customer service based administration has great impacts on the country’s economic growth. The nation has reinvented the stated government in crucial ways to function for the best for its entire people. Their policies has shifted a 1.5 billion dollars deficit in the budget without the use of on-time accounting tricks and the nation is paying down its huge debts – something that upgraded the Fitch ratings of the nation’s reputation to positive.
Refinancing the wider federal unemployment insurance loan of the nation has also enabled the stated to repay its 3.3 billion dollars Unemployment Trust debt to the United States Treasure and lead to fundamental savings for employment providers of the nation. These operations will save the business community about one billion dollars ov.............
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