Monthly Archives: September 2012

Monthly and quarterly economic indicators (Sept. Reports)

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•Unemployment rate increases, while the number of unemployed declines (monthly)
•Vacancies rates increase for Detroit (quarterly)
•Purchasing manager’s index declines (monthly)
•Bankruptcies decline (quarterly)

The following post provides data on economic indicators specifically related to Detroit and Southeastern Michigan. While certain indicators will be updated monthly, such employment numbers, others are only produced quarterly, biannually, annually. This post mainly focuses on the indicators that can be updated monthly or quarterly. Be advised, this is a work in progress.

The above chart shows the jobless rate for both the state of Michigan and the city of Detroit. The jobless rate in Detroit  is consistently higher than that across the state, although both follow similar trends. Also, there has been a more dramatic increase in the jobless rate in Detroit since April than that at the state level. According to the most recent data, the jobless rate was at 21.1 percent in Detroit in July; it was at 10.3 percent for the state.

A more historical look at the unemployment rate for the state of Michigan and city of Detroit can be found in a previous Drawing Detroit post here.

The employment numbers throughout the year have been somewhat inconsistent in for the city of Detroit. While there was an increase from January to April, the number of employed decreased by about 4,000 from March to April. From April to July employment numbers again began to increase. Then,  number of employed dropped to about 277,100 from about 279,000 the previous month.

A more historical look at the number of employed in the city of Detroit can be found in a previous Drawing Detroit post here.

 

When strictly examining the number of residential vacancies the data indicates these are increasing, just more gradually than in the past. From September 2011 to June 2012 the percent of residential vacancies have increased by .5 percent or less, per quarter.

The total percent of vacancies (residential and business combined) in Detroit  has gradually been increasing since 2005, the rate of increase is slowing. The June 2012 vacancy rate of 21.69 percent is higher than the March 2012 level of 21.19 percent. The vacancy rate in December 2005, which is the earliest data this chart shows, was at 10.08 percent.

The Purchasing Manger’s Index is a composite index that is derived from five indicators of economic activity: new orders, production, employment, supplier deliveries, and inventories.  A PMI reading above 50 percent indicates the economy is generally expanding; levels below percent show signs of decline.  A consistent PMI percent of 42.7 percent typically means the overall economy, or Gross Domestic Product (GDP) is generally expanding; if the percent is consistently below 42.7 this means the economy is typically declining.

The above graph compares the Southeast Michigan’s PMI in 2011 and 2012 (note: not all 2012 number are available). The data, provided by Institute for Supply Management  and the Wayne State University School of Business  shows that in 2011 the PMI never dropped below 47.6. However, from May to August of 2012 the PMI has been continually decreasing, with the most recent percentage being recorded at 45.7. The PMI showed a decreasing trend from May to July of 2011, with the lowest percentage during that time being recorded as 51.7

Also, a comparison of January to August in 2011 and 2012 shows that while the PMI was higher in January of 2012 than in January 2011, it has consistently remained lower since then, with the exception of the month of July.

Both business and personal bankruptcies filed in the Detroit Metropolitan Statistical area (Detroit-Livonia-Warren) have been declining over the last year. In both cases, the declines are very substantial.

Great Lakes water levels

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As has been shown in earlier posts, Michigan has experienced a hot and dry summer. These conditions have not only affected Michigan’s land, but also the Great Lakes. The chart above shows the historical long-term averages and record highs and lows for the each lake in the Great Lakes basin for the month of September. The month of September was chosen because it is the end of summer and the current month. Lake Michigan and Lake Huron are grouped as one throughout this post as they are hydraulically the same body of water. Also, throughout this post it must be kept in mind that Lake Superior is the largest and deepest of the lakes followed by Lake Michigan/Huron, Lake St. Clair, Lake Erie, and then Lake Ontario.

The above five charts show the historical data on water levels in the Great Lakes since 1918; each chart only looks at water levels in the month of September. All the charts show there has been an overall trend of water levels declining from where they are at in previous years. This trend began in 2009 for lakes Superior, Huron, and Michigan while the remaining three have seen water levels begin to steadily drop only about a year or two ago. Keith Kompoltowicz, chief of watershed hydrology at the U.S. Army Corps of Engineers Detroit office, said some researchers and media outlets like to look for a 15 or 30 year trend to the flucuation of the water levels. However, he said no short-term or long-term trends can be determined since U.S. Army Corps of Engineers has only been keeping data since 1918. Currently, U.S. Army Corp of Engineer data shows that if September, October, and November continue to experience low amounts of precipitation lakes Michigan and Huron will likely drop below record water levels. As water levels begin to drop this also has an affect on the ecosystems which live in and around these lakes.

Editorial: A shift in energy sources is needed

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Michigan is facing hotter summers, warmer winters and decreasing rainfall. Levels of several of the Great Lakes are dropping.

Whether all of this is a result of a change in the weather or a result of climate change is debatable, but as a wise man once said, “When insurance is cheap, buy heavy.”

This week’s Drawing Detroit post on the sources of energy used to power Michigan indicates it is time for us to heed this advice. The post clearly shows that Michigan is now committed to an energy budget that drastically increases the risk of heating up the atmosphere, while it ships billions of our very hard earned dollars out of the state.

Shifting to other energy sources will decrease the risk of atmospheric warming and increase our income. Specifically, the post shows we are hugely dependent on coal imported from outside our state. It is already well understood coal is probably the greatest source of greenhouse gases heating up our environment.

If we substitute energy produced in Michigan for highly polluting coal imported from out of state, we get the double benefit of cleaner air and more income to the Michigan producers of this energy.

Happily, we all have the opportunity to step up and assure that this will happen by voting for the Michigan Energy, Michigan Jobs proposal on the ballot this November 6. This proposal will require Michigan electric utilities to increase to 25% the amount of retail electric sales that come from renewable sources, including wind, solar, biomass and hydropower. They must accomplish this by 2025.

So let’s buy some insurance, reduce greenhouse gases and increase Michigan jobs by voting yes to this proposal. LT

Energy consumption and production in Michigan

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On August 27, ballot language for the Michigan Energy, Michigan Jobs proposal was approved. This proposal seeks to discover if registered Michigan voters are in favor of a constitutional amendment that requires utilities to obtain at least 25% of their electricity from clean, renewable energy sources. Given that this proposal is on the ballot, and that renewable and alternative energy resources are gaining more mainstream focus, Drawing Detroit has decided to create the following posts to explore the use of energy resources in the state.

The above figure shows that in 2009 the state of Michigan spent more money on coal-produced energy than on any other type of energy resource. Michigan produces energy resources such as nuclear power and biomass fuels in state while it imports all of its coal.

As stated previously, Michigan’s number one energy expenditure is on coal. This has been the trend for at least  the last 15 years, as shown by the graph above. While expenditures on the various types of energy resources shown in this graph have been increasing since 1984, coal expenditures have increased the most, remaining at least $6.5 million above petroleum, gasoline, and diesel expenditures, among others.

Michigan’s expenditures on energy use related to transportation gradually increased from 1970 to 2000.  After a slight drop in expenditures from 2000 to 2002, there was a dramatic increase in spending  from 2002 to 2008.  During this time period, total spending on transportation energy increased by approximately $10.4 billion.  After a decrease in spending of approximately $5.4 billion from 2008 to 2009, transportation expenditures began to increase again in 2010.

The above graph shows the approximate amount of energy, by type and in btus, that the state of Michigan produced in 2009.  Although Michigan’s energy expenditures are used mainly for coal, the above graph shows that Michigan does not produce any of the coal it used for energy in 2009. The main energy resource Michigan produced was nuclear energy; the state currently has three nuclear reactor plants in operation.

According to the Energy Information Administration (EIA), the drastic decrease in natural gas production from 2007 to 2008 seen on the graph was an anomaly that derived from an internal error from Michigan’s energy data reporting system. While the EIA has confirmed the 2008 number is correct, they are not as confident with data for 2007 and years prior.  While this anomaly accounts for the dip in natural gas energy in 2007, an overall look at the graph shows that crude oil production in Michigan began to decrease in 1986, the same year natural gas production began to increase. Overall the amount of fossil fuel resources produced in the state has been decreasing.

As previously stated, Michigan does not produce coal, but instead imports it. The above chart shows that Michigan relies on 10 states for its coal resources, with the majority of its coal coming from Wyoming and Montana; both these states produce the largest amounts of coal.

The above graph shows that other resources in Michigan are increasingly being used for energy.  Most recently, biofuels, which weren’t tracked until 1981, have begun to be used.  Also, it should be noted there was a decrease in nuclear energy production from 2008 to 2009 because the Donald C. Cook nuclear reactor shut down in September 2008 due to a damaged turbine; it did not return to service until November 2009.

The above graph depicts the amount of energy generated in the state according to how much money is spent on each resource. While coal is imported into the state, it is still the resource most commonly used for energy production, the resource used the most for consumption and the resource in which the most amount of funds are spent on.

This graph demonstrates how much energy Michigan residents consume according to energy resource type. Nuclear energy is the second most-used type of energy resource, but was still about 450 trillion Btus below the amount of coal energy consumed in the state in 2009.

The above graph focuses on the amount of energy used in the state of Michigan for electric purposes. True to the trend seen throughout the post, coal powered energy is the most commonly used resource for electric consumption, with nuclear energy coming in second and natural gas coming in third.  While the graph shows 0% of the state’s electric energy is produced by geothermal, solar, wind, and petroleum sources there were amounts produced by these sources, just not large enough to register to the amounts consumed by a resource like coal.

Well construction in Michigan and growth related to Urban Sprawl 1930-2005

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The table and images below show wells drilled from 1930 to 2005. Table 1 describes the number of wells constructed in each of the seven counties in Southeast Michigan, from 1930 to 2005. During this period, a total  of 75,145 wells were constructed in this region.  Also, Table 1 and the graph, Well Construction by County, Southeast Michigan 1930-2005, show that Livingston County had the highest number of wells constructed in the region (21,295), with Oakland a close second (20,893).

The graph in Figure X below depicts the number of wells in each county from 1930 to 2005.  Looking into the county level construction of wells through the decades, five of seven counties (Livingston, Oakland, Washtenaw, Macomb, and Monroe) showed significant increases in construction between 1960 and 1990 (See Total by County column).  Livingston County had the highest number of construction between 1970 and 1990 but between 1991 and 2000, Oakland County had more than twice the number of wells constructed compared to Livingston County, indicating a shift in growth area in the region.

The significant increase in the number of wells constructed in St. Clair County between 1990 and 2005 is also worth noting. Only 17%, or 369, (n=2,196 excluding undated wells) were built from 1930 to 1990 but 83% of dated wells, or 1,827 wells, were added from 1991 to 2005. About 4% or 86 wells were undated. St. Clair County showed indications of increased demand for water consumption during these decades. On the other hand, while Wayne County indicated 74%, or 735 (n=990, excluding undated wells), construction between 1930 and 1990, only 26% of dated wells or 255 wells were added past the 1990s.

Overall, wells as water sources for household/domestic, industrial, or public municipal uses are basic infrastructures necessary for development and growth in a given geographic area. The images and table on wells construction presented here provide an alternative way for viewing the pattern of growth and transformation in Southeast Michigan.  To a degree, the distribution of wells represents urbanization beyond the boundaries of the organized delivery of municipal services. As such the images represent a reverse image of dense urban development. At the same time, the distribution shows a broad swath of development beyond city boundaries.

Table 1 and Figure X and Y summarize the data on wells constructed in Southeast Michigan by county and decade. Table 1 and Figure X includes 7.1% (n=75,145) of wells lacking information on date of construction but Figure Y excludes this information.

The images below depict well construction by decade from 1930 to 2005. The first image shows the total construction over time and the remainder break down the totals by decade.