LANSING – The Michigan Restaurant Association today announced that the state’s food and beverage service industry expects slow growth in 2006. The slow growth projection in Michigan contrasts with those of most other states, which expect steady to strong growth in the new year.  

Rob Gifford, executive director of the association, said he expects Michigan restaurant sales to top $12.3 billion in 2006, up from projected 2005 sales of $11.8 billion, an increase of 4.1percent.  “Growth in the Michigan restaurant industry was modest in 2005, but we are, unfortunately, expecting a slower rate of growth in 2006.”  

Nationwide, Gifford said the industry expects steady to strong growth, with a projected average growth rate of 5.1 percent for total sales over $511 billion, the first time the industry expects to top the half trillion dollar mark.  He predicted that states like Nevada and Arizona will be leading the way and show sales growth at rates of over eight percent.  Meanwhile, Michigan will be in the bottom fifth of states in sales growth this year, and will even post growth below the average for the Great Lakes states.  The region, including Michigan, Ohio, Indiana, Illinois and Wisconsin, is expecting growth of 4.2 percent.  

The good news, according to Gifford, is that the state appears to have met its projected growth for 2005.  As 2005 began, the MRA projected total restaurant sales in Michigan to be $11.8 billion, an increase of 4.4 percent over 2004.  It appears that total sales for 2005 will have topped $11.8 billion for a total of $11.87 billion.  

Gifford said that there are a number of reasons why Michigan’s forecast is not as bright as that of other states.  “This comes as news to no one, but Michigan continues to struggle economically while the rest of the country has improved,” said Gifford.  “High unemployment and job uncertainty, combined with a comparatively high tax and regulatory burden, and stagnant growth in disposable income, continue holding a thumb on Michigan’s economic growth.”