December 4, 2006 - The Detroit Economic Club (DEC) was pleased to host its 41st Annual Economic Outlook for 2007 luncheon. Industry leaders from auto, finance and construction forecasted the 2007 economic outlook in their respective sectors. Panelists included: David Sowerby, CFA, Vice President, Portfolio Manager & Chief Market Analyst, Loomis Sayles & Company, Dr. Sean McAlinden Ph.D., Chief Economist & Vice President, Research, Center for Automotive Research, and Ronald Hausmann, P.E., President - Heavy, Civil & Special Construction Group, Walbridge Aldinger. The panel was moderated by Paul W. Smith, morning host, News/Talk 760 WJR.

David Sowerby noted that while Michigan's auto industry is taking a big hit, the state is poised for growth in other sectors. "The non-auto profits are running ten to twelve percent, in some cases twenty percent ahead of year-ago levels," Sowerby said. "Companies like Masco have been very good performers. Stryker on the west side of the state - which has, I’d say, pound for pound been the best Michigan company in the last twenty-five years. Other names we’ve owned in portfolios at times, such as a small technology company Rofin-Sinar, Perrigo which makes generic pharmaceutical and cough and cold medicine. Michigan has got plenty of non-auto companies that have done well, and I think that’s still going to be the case as the profitability in ’07 looks to grow between ten to fifteen percent for the non-auto Michigan companies."

With regards to the automotive industry, Dr. Sean McAlinden was frank about the inevitable economic impacts of restructuring efforts by the domestic manufacturers in 2006. "It’s not going to get any better in the next two to three years – it’s actually going to get, in many ways, economically worse," McAlinden said. "We haven’t seen it really hit us yet, which is really the message I came here to deliver today, is that all of the bad headlines you’ve seen this year are going to get much, much larger. Since none of the large plants have closed yet, none of the biggest layoffs of the salaried workers have actually happened yet. And they’re about to in the coming months. So we’ve got to prepare ourselves and work on everything else we’ve got to do."

While Michigan looks toward new industries for growth and the domestic automakers continue to adapt to the evolving global market, the state's construction industry is also experiencing a shift. Ronald Hausmann noted that while residential construction has declined, larger projects will be making up for those losses to keep next year's revenues even with those of 2006. "We’ve identified a good seventeen large projects that may start in 2007 that are relatively off the radar screen. U of M Stadium, a lot of Detroit Public Works programs, five large hospital facilities. So there is light at the end of the tunnel, and we are hopeful for a reasonably good 2007 in our industry."

As we look ahead to this holiday season, we can also look back on 2006 as a tremendously exciting year for the Detroit Economic Club. The DEC continues to be a premier platform for exposure to the great business, government and social issues of the day, and we are proud of the important voices you have heard from our podium so far this season.

With 2007 right around the corner, the DEC is in full swing with a stellar meeting lineup. Following our live unveiling of the 2007 North American Car and Truck of the Year finalists, Auto Show Panel Discussion and annual Auto Show Luncheon, we will welcome a host of CEO's - from Ben Verwaayen of the BT Group, to Samuel DiPiazza, Jr. of PricewaterhouseCoopers International Limited, to Anthony Earley, Jr. of DTE Energy and Hector de J. Ruiz, Ph.D of Advanced Micro Devices, Inc. We will also bring you the Honorable Michael Leavitt, secretary of the U.S. Department of Health and Human Services, along with Head Coach Mike Babcock and General Manager Ken Holland of our ever-popular Detroit Red Wings. Please continue to watch our Web site as we add more meetings.

Our best wishes to you and your families this holiday season and in the upcoming new year. I look forward to seeing you at next year's meetings.

All the best,

Beth