Public schools buzz with the news of classes that were cut, teachers that were laid off, and perhaps worst of all, teachers moved to a department where they are less than proficient. The students don’t seem to fare any better. According to Snyder’s Special Message on Education Reform, 50% of Michigan students have acceptable writing skills and 2010 ACT score assessment revealed 238 schools failed to have a single student that was ready for college.

While the many atrocities appear daunting, they could actually be incentive we need to turn education around 180 degrees. This low point could be Michigan’s golden age for innovation. Snyder’s education reform focuses on rewarding academic success, constantly evaluating teachers, and encouraging parent involvement—three key principles of education.
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Article written for www.annarborbusinessmagazine.com

How do the next 6-12 months look for the automotive industry? “It’s uncertain because of the uncertainties in the economy,” says Dr. David E. Cole, Emeritus Chairman and Board of Directors member of the Ann Arbor-based Center for Automotive Research (CAR). “But the main thing in the near future, particularly for the domestic, Michigan-based manufacturers, is that they will be increasingly profitable and they will be hiring.”

Cole is a prolific, oft-quoted expert on the auto industry known by virtually everyone who is intimately involved with the industry. His thoughtful and analytical perspective of the industry has earned Cole respect in accurately understanding and communicating automotive trends. So, Cole’s positive outlook is encouraging for the Ann Arbor area.

Incidentally, regarding the federal government selling of its shares of Chrysler, Cole says “It’s no big deal. It means that the government is getting rid of its equity and Fiat will now have a controlling interest in the company. The UAW Healthcare Trust still owns a significant fraction of the company and we’ll see how that develops over time. I think it’s a good move.” Read more…

Baker Strategy Group (BSG) relocated to a new office at 214 S. Main St., Suite 212 Ann Arbor, MI 48104, directly over Espresso Royale Café. The space is managed by Curtis Property Management, a long-time property management firm in Ann Arbor. Formerly located with growing strategic partner MOVE  Communications, the change in headquarters is an important step for Baker Strategy Group.

Now in the heart of Ann Arbor, the site offers more accessibility to local clientele and a great workplace for BSG staff. “We love Ann Arbor, and we are thrilled to be located right on Main St.  It’s always been our goal to be part of the Ann Arbor community, and our new location provides the sense of vitality and energy that comes with operating in close proximity with so many local downtown businesses,” explains David Baker, Managing Partner.

The new location has many benefits for newer members of the team. Analyst Josh Zuellig notes that the downtown location allows him to take public transportation to work, saving him gas, parking, money, and time. “In today’s competitive marketplace,” notes Baker, “our goal is to provide the best work environment we can in order to attract the best talent. This will help us to better collaborate with our strategic partners and to better serve our clients.”

Article written for www.annarborbusinessmagazine.com

For the past couple of years, housing prices have been declining at a 6%-7% annual rate. And according to Dana Johnson, Senior Vice President and Chief Economist at Comerica, this drop in wealth has been followed by a drop in consumer spending.

So, the sagging housing market plays a key role in the Ann Arbor area economy. The question is where the market is now, and where is it going?

To help answer this question, we spoke with Bill Miller, General Manager of Charles Reinhart Company Realtors headquartered in Ann Arbor.

According to Miller, “We are very, very fortunate here in the Ann Arbor area and Washtenaw County in that we’re bucking the national trend. I think we actually went into the recession earlier than the rest of the country and are coming out of it earlier.” Read more…

Article written for www.annarborbusinessmagazine.com

The U.S. economy will experience mediocre growth in 2011 and 2012. At a June 22 press conference, Ben S. Bernanke, Chairman of the Board of Governors of the Federal Reserve System, announced a dimmer view of the U.S. economic recovery than had been previously forecasted.

Bernanke notes that while he doesn’t have a “precise read on why this slower pace of growth is persisting,” we all must “acknowledge the possibility that some of the slowdown is due to factors which are longer-lived and which will be still operative” in 2012.

While some were surprised by Bernanke’s forecast, those who heard Dana Johnson’s presentation last month should not be surprised. Dana Johnson is Senior Vice President and Chief Economist at Comerica, although he has now announced his retirement this year. At his last breakfast presentation at Weber’s Inn on May 25 in Ann Arbor, Johnson walked through our national and local economic health and gave his thoughts on the near-term economic forecasts.

“The message that I want to give,” says Johnson, “is that, on a national level, we’re in for mediocre
growth.” Michigan’s growth, too, will be slow, but it is “going to continue to grow.”
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Article written for www.annarborbusinessmagazine.com

Gas prices are high. And they have fluctuated a good deal recently. In May, some of the Ann Arbor area gas stations saw the per-gallon price reach near $5. And the price of a barrel of crude oil was dancing around a $90 and $120 range. Experts expect prices to drop soon, but forecasts are uncertain.

The price of oil matters, of course, because it affects our Michigan economy in a number of ways beyond the pump: higher product shipping costs, price pressures on exports, downward pressure on consumer demand, and increased cost of oil derivatives such as plastics and polymers.

Prices are down for the moment, relative to the peaks in May, but what happens next? Can we expect gas prices to fall back to around $3 per gallon again soon? Will they go above $5 per gallon?

The short answer: We know the factors that impact gas prices, but we can’t predict prices beyond the next 6 months. It turns out that, as with the factors that impact forecasting the weather for next weekend, the mechanics that determine oil prices in a dynamic global market are staggeringly complex. Read more…

Article written for www.annarborbusinessmagazine.com

At the end of April, we caught up with Governor Snyder and he spent some time explaining the situation in Michigan, what changes need to take place, and why we have reasons to be optimistic about Michigan’s future.

Q: Governor Snyder, in a recent survey by the Michigan Manufacturers Association, Michigan rates very poorly as a “business friendly state.” Talk about the business climate in Michigan and what needs to change in Michigan to improve our state’s prospects for the future?

If you looked at where Michigan has been, we all know that we’ve gone through a major economic crisis, and we’ve had a broken government system to go along with that: a broken tax system, a broken budget system, and a broken regulatory system. If we fix these broken systems, we can really encourage the reinvention of Michigan.

One of the things we can do from a government perspective is to correct those problems in a positive and constructive way. Take, for example, job creation. Government doesn’t create jobs; it creates the environment in which jobs can flourish and free enterprise can work. And in many respects, government has been an impediment to that. So, one of my focus points as Governor is to set us in a direction that says, “How can we move from an environment that has impeded job creation to an environment where we can encourage new jobs to happen?” And that’s the path we’re on now. Read more…

Article written for www.annarborbusinessmagazine.com

Michigan is not business-friendly, but there’s reason to be optimistic. That is the general view from various business sectors in Michigan. Across the state, companies like Tipaloy, Inc. are cautiously optimistic while very aware of a business climate in Michigan that needs to improve.

In March, the Michigan Manufacturing Association (MMA) revealed the results of our annual Michigan Manufacturers Survey. This year’s results contained two very clear messages: 1) Michigan is definitely not a business-friendly state, and 2) manufacturers are more optimistic than ever about their company outlook in 2011.

Chuck Hadden is President and CEO of MMA. According to Hadden, “This is an extraordinary time of change, both for Michigan and for manufacturers.” For the first time in years, small businesses have a reason to believe in brighter days for Michigan.

Dana Johnson agrees. Johnson is the Chief Economist at Comerica Bank. Along with research assistant Meaghan Derrick, Johnson publishes the highly esteemed Michigan Economic Brief.

Johnson’s analysis, too, sees for Michigan an unfriendly business environment juxtaposed with real economic improvement. Michigan is generally unaccommodating to business and, according to Johnson, “the state would be well advised to do everything it can to create a more business friendly environment.” At the same time, however, “Michigan is expanding quite briskly” and is now “repeating the historical pattern of having a stronger recovery than the nation after having a much worse downturn.” Read more…

Article written for www.annarborbusinessmagazine.com

With the first quarter of 2011 behind us, it seems safe to say that the commercial real estate market in the Ann Arbor area will do well in 2011. Vacancy rates have dipped, and local brokers are reporting an increase in activity compared to 2010.

At the end of each year, Swisher Commercial produces a Vacancy Report in the Ann Arbor area based on based on a review of 300+ buildings of 3,000 square feet (sf) or larger office and flex space. According to the report, the total market vacancy rate for commercial property at the end of 2010 was 15.04%, a solid decrease of 2.58% from 2010 levels.

Bart Wise is a broker with Swisher Commercial and specializes in the leasing and selling of office, high tech, and light industrial buildings throughout Washtenaw County. Wise explains that this vacancy report is made available to everyone in the interest of building up the Ann Arbor area.

“We do this report every year just for the Ann Arbor area,” Wise explains. “We don’t necessarily enjoy producing the report, but we believe that data will help all of us. Data doesn’t tell the whole story, but it is a useful tool.” Read more…

Article written for www.annarborbusinessmagazine.com

At a national level, the residential real estate market seems to still be stuck. Last month, the National Association of Realtors reported a drop in home sales and a median home sale price of $156,100, the lowest it has been since February of 2002. A recent Wall Street Journal article declared that this is “setting the stage for steep discounting in the spring market.”

Yet optimism remains locally, even despite Michigan’s tattered economic morass.

Kay Merx is the Office Manager for Saline and Milan Real Estate One offices, and is Board President Ann Arbor Area Board of Realtors. Merx has been selling Real Estate in Southeast Michigan for over 25 years and has an in-depth understanding of the Ann Arbor area residential real estate market.

“We see the market stabilizing,” states Merx. “Certainly some parts of our Washtenaw area market are stronger than other parts of our market. So this isn’t a universal statement that everything’s stable and all sales are improving. But in the big picture, we are seeing a trend. We are seeing prices in much of the Ann Arbor and surrounding areas moving in the right direction.”
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