The Michigan economy isn't rebounding as quickly as expected lagging behind those of other major manufacturing states, a group of economic experts from throughout the state say.

The group, which includes experts from the state Treasury Department and the University of Michigan, admitted at a conference Friday at the Capitol that the revenue estimates they made earlier this year came up short of their forecasts.

According to the new projections, the general fund revenues for the fiscal year that began Oct. 1 will total about $7.8 billion, more than $250 million short of the May prediction.

Senate Fiscal Agency Director Gary Olson said during the past two months, the agency became concerned they overestimated their earlier revenue forecast.

Back then, "we felt the economy had bottomed out and it was turning around. We had data in the spring that was promising," Olson said. "But over the summer, the job situation in the state reversed course while the U.S. job situation has improved.

"Clearly, we have a situation where we did an excellent job estimating for the U.S. economy, but not the Michigan economy."

During the past year, 57 percent of Michigan jobs were in industries with decreasing job performance, according to statistics from the University of Michigan's Research Seminar in Quantitative Economics, or RSQE.

"Four quarters after the U.S. payroll job count hit its low, the Michigan payroll job count has yet to turn the corner," said George Fulton, a RSQE senior research scientist. Fulton presented the outlook findings for Michigan.

The Michigan economy has gone 17 quarters since the second quarter of 2002 without making a full recovery, and the RSQE predicts it will take more than 30 quarters in total to do so. That means it could take until at least the end of 2009 before the economy is fully resuscitated, according to their predictions.

"Whereas the recession of 2001 was mild and weak, the subsequent economic recovery was stagnant," said Joan Crary, an assistant research scientist with the RSQE. Crary presented the U.S. findings.

Michigan employment has increased every month since September 2003, but the rate of increase has been inconsistent and slower than most states. Michigan manufacturing employment has decreased steadily since peaking in July 1999.

In Michigan, employment losses in the 2000-03 Transportation Equipment Sector have outpaced other major auto manufacturing states such as Ohio, Indiana and Illinois, according to the U.S. Department of Labor's Bureau of Labor Statistics.

Additionally, Michigan was the only large state with a negative percentage change in wage and salary employment from December 2003 to October, with a -0.4 percent change. Florida leads the way with a 1.6 percent increase, with Pennsylvania and Texas both showing increases of 1.2 percent.

"Certainly, Michigan is a heavy manufacturing state and has relied heavily on the auto industry," said Terry Stanton, spokesman for the Michigan Department of Treasury. "When there are layoffs in the auto industry and a slump in jobs, there's an impact that other states don't experience so severely."

Because the Big Three automakers have lost market share during the last several years, it has hampered the state's labor force, which keeps the economy from bouncing back, Stanton said.

But Stanton cautioned it's still to early to tell how far in the red the state will be this fiscal year.

"The revenue estimates agreed to are very preliminary," he said. "The fiscal year 2004 books aren't closed yet, and by January, we'll have a much better idea of how fiscal year 2005 is looking."

Evan Rondeau can be reached at rondeau1@msu.edu.