Bank's Economist Sees Delayed Growth Ahead

DETROIT-David Littmann, senior vice president and chief economist for Comerica Bank of Detroit, predicts the Southeast Michigan area will see a solid growth pattern in 2003, but that commercial real estate development may hold still until the second half of the year. He says the Recession Watch Index calls for unequivocal solid growth, and that this area will continue that national pattern.

Littmann reports Michigan’s economy was running 7.2% ahead of last year, through August, and the Detroit area economy was 6.7% ahead through the first nine months.

In the first few months of 2003, Littmann says, this area’s economy willslow, with the growth rates easing down to 3% to 4%.

“If local automakers and suppliers can move cost-cutting and productivity-quality enhancement into higher gear, using available technology, then nearly every firm that has survived the recent downturnwill be profitable by year-end,” Littmann says.

He adds household spending will continue at a growth rate of 3.5% orfaster. However, plant and office expansions by business and new capitalconstruction projects undertaken by governments will be deferred until the second half of 2003, or until uncertainty declines, Littmann believes.

“I would label our regional economic outlooks as good and solid, but lacking the robust quality that has characterized the pattern at this stage in past expansions,” Littmann says.