U-M Economists See A Flat Year For Michigan, Then A Rebound

Michigan's economy will essentially tread water this year before picking up, according to the University of Michigan's closely watched forecast released in September. Economists at the university's Research Seminar in Quantitative Economics project the state will add just about 3,200 payroll jobs in 2026.

A slow 2026

The near-flat growth reflects a difficult stretch for Michigan's core industries, especially manufacturing. The forecast expects the state's manufacturing sector to lose roughly 4,900 jobs in calendar 2026, though the economists note those losses primarily reflect the sector's path in the second half of 2025 rather than a fresh collapse.

Better days projected

The outlook brightens after this year. The forecast calls for Michigan to add about 15,400 payroll jobs in 2027 and another 4,200 in 2028, a meaningful acceleration from 2026's near-standstill.

The projections land amid real strain in the auto sector, where softening electric-vehicle demand has scrambled hiring and investment plans. For a state whose fortunes rise and fall with its factories, the U-M forecast is a reminder that the current soft patch, while real, is expected to be temporary rather than structural — provided the rebound the economists are counting on actually arrives.