The report says, despite big job losses, the state’s on a path to recovery as the COVID-19 crisis winds down and that Michigan is expected to experience a full economic recovery by 2023.
The state relies heavily on the highly respected U of M Research Seminar in Quantitative Economics to help make budget projections.
The report says the state’s making progress on vaccinations, there’s a pent-up demand for workers, and people seem ready to start spending as the pandemic ramps down.
Economist and leader of the U of M research seminar Gabriel Ehrlich says that Michigan's economy ought to be improving rapidly through the beginning of the summer.
“We expect job growth to pick up very nicely through the rest of this year and into next year, and then as we get closer to a full recovery, we do expect job growth to start slowing down a little," Ehrlich said. "But our forecast is for Michigan’s job count to get back to where it was before the pandemic about the end of 2023”.
Though Ehrlich also says the COVID crisis led to a deep loss of jobs and that it will take time to recover.
“We’re still in a pretty deep hole," Ehrlich said. "We should start climbing out pretty quickly here, but just because of how much we have to climb, it’s really going to be another two and a half years before we get back to where we were before the pandemic".
The report's projection assumes vaccination rates improve and that a new variant doesn’t up-end the pandemic recovery. It also assumes there are no new supply chain issues that would slow down getting parts to factories.
However, Eherlich says Michigan is better positioned than it was after the Great Recession because the fundamentals of the economy were in good shape before the COVID-19 pandemic.