Analyst: “Site Selection rankings provide only a limited picture of a state’s economy”

U.S. Labor, United Van Lines data suggest Michigan’s economic lethargy

For Immediate Release
Contact: Chris Bachelder, Director of Communications
Phone: (989) 631-0900

MIDLAND — In a paper posted today on the Mackinac Center for Public Policy Web site, Director of Fiscal Policy Michael D. LaFaive cautioned state officials and the public not to assume Site Selection magazine’s annual ranking of a state’s new and expanded facilities is a proxy for its economic vibrancy. The Center is a free-market research and education institute headquartered in Midland, Mich.

"It’s worth remembering," noted LaFaive, "that Site Selection rankings provide only a limited picture of a state’s economy." LaFaive pointed out that the rankings are based in part on what states report to the magazine, so that "states that devote more resources to economic development functions are probably more focused on gathering data" and somewhat more likely to win the award.

To balance the view provided by the Site Selection rankings, LaFaive referred to a January United Van Lines report showing that in 2004, the residential exodus from Michigan was at its highest point since 1982 — more than 60 percent "outbound" — and one of the worst in the country. He also cited federal statistics showing weak economic growth, including employment growth, in recent years and in 2004.

LaFaive’s paper can be viewed at www.mackinac.org/7000.

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