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January, both our
body shop and our
service business was
up," he says.
And there are
other bright spots.
Discount stores
begin doing better
than luxury stores.
Modest restaurants
pick up the business
that the upscale
restaurants lose. And
although sale of
homes priced over
$400,000 has slowed
Harold Beznos
remarkably, sales of
more modest homes
has been little effected.
"A soft economy also sees increas-
es in opportunities for business con-
sultants, specialists in turnaround
management, cost-cutting, stream-
lining and employment," notes
Littmann.
Beznos sees other benefits. When
sales of luxury homes is extraordinarily
high, the demand for skilled labor s
rockets. "There's just not enough
skilled labor and quality contractors to
handle all of the development,"
Beznos says. As a result, quality is
affected, and the value for the dollar
spent decreases.
But as sales slow, development
slows, and contractors and skilled
labor become more available. "The
result is a better value for both the
builder and the buyer."
Housing starts were down 5 percent
in 2000, according to Littmann, but
were still good. He doesn't expect any
further erosion in that sector.
Fortunately, there is no excess
supply of speculative housing that
has to be dumped on the market,
further depressing it, according to
Beznos.

Unemployment Still Low

Unemployment in Michigan is still
below the national average. At its
recent low, it stood at 3.7 percent.
Now it is up to 4.5 — a figure still
considered very low by many.
But we shouldn't take too much
comfort from these figures, warns
Littmann. "The unemployment isn't
low because of a strong economy," he
says. "It's low because Michigan's pop-

ulation is growing at
a slower rate than
other states." But
stable employment is
crucial to long-term
economic health,
and Littmann is con-
fident that we will be
able to maintain sta-
ble employment lev-
els.
But in another
sector, the Detroit
area is not benefit-
ing. "Detroit isn't
even on the radar
screen for high-tech
businesses," says
Littmann, "but this isn't all bad. It's
true that high tech isn't a major part of
our economy, but it's also true that we
haven't experienced any dot.com disas-
ters."

Economy Will Come Back

What most predict is that the down-
turn in Detroit's economy will contin-
ue for a while, with a leveling off by
June, followed by another period of
strong growth.
Auto sales will rebound, along with
the stock market, retail sales and resi-
dential development.
"Detroit is heavily into car leasing,"
says Tamaroff. "Forty percent of our
new sales are leases." That will eventu-
ally help sales rebound, Tamaroff
thinks, since buyers will be forced to
act in 24-36 months when their leases
come due.
Schostak's Howard Schwartz predicts
continued growth from established
retailers as well. "K-Mart, Kroger,
Farmer Jack and others are looking for
new locations to replace older locations,"
he says. "'There's lots of growth coming
in the grocery sector."
As for the city of Detroit itself,
Schwartz says, "Most major national
retailers don't understand the urban
economy, but they are learning. Home
Depot, for instance, is committed to a
location within Detroit."
Overall, predicts Littmann, the
economy of the Detroit area will see
short-term cyclical movement and
readjustment. But in the long-term, he
says, both Detroit and the nation
should see a continuation of a posi-
tive, growing economy. ❑