Weak Dollar Reshapes Michigan’s Business Landscape Heading Into 2026

The dollar fell more than 8% last year against a basket of major currencies as markets priced in potential Federal Reserve rate cuts, shifting global capital flows, and lingering uncertainty around U.S. fiscal and trade policy. Economists say the move is not a crisis signal—but for Michigan companies, it is a meaningful strategic variable.

“This isn’t about the dollar collapsing,” said Mark Zandi, chief economist at Moody’s Analytics. “It’s about how businesses adapt. Export-oriented states like Michigan can benefit, but higher input costs mean the gains aren’t evenly distributed.”

Michigan Industry Impact at a Glance

At a high level, the weaker dollar redistributes advantage rather than creating clear winners across the board:

• Tourism & Hospitality: Strongly positive

• Manufacturing: Positive

• Agriculture & Agribusiness: Positive

• Automotive & Mobility: Mixed

That mix reflects the balance between export competitiveness and rising costs for imported materials.

Automotive & Mobility: Export Boost Meets Cost Reality

Michigan’s largest industry sits at the center of the dollar debate.

On the upside, vehicles, parts, tooling, and engineering services produced in Michigan are more affordable for overseas buyers. That improves competitiveness in Europe, Asia, and Latin America—particularly for Tier-1 and Tier-2 suppliers with global customers.

“A softer dollar gives Michigan auto suppliers a pricing edge they haven’t had in years,” said Joe Brusuelas, chief economist at RSM US. “That matters in an industry where contracts are fiercely competitive.”

But the gains come with pressure. Many automakers and suppliers rely on imported electronics, semiconductors, battery materials, and specialty metals. Those costs rise when the dollar weakens, squeezing margins for firms without pricing power.

“For us, it’s a tradeoff,” said Kevin Williams, CFO of a Southeast Michigan auto supplier. “Exports look better, but imported components are more expensive. We’re leaning harder on hedging and supplier renegotiations to protect margins.”

Manufacturing: Tailwind for Exports, Caution on Investment

Beyond autos, Michigan’s advanced and traditional manufacturing base—industrial equipment, robotics, automation, and precision tools—generally benefits from a weaker dollar.

Export demand is improving as Michigan-made machinery becomes more cost-competitive abroad. The currency shift also strengthens the business case for reshoring and nearshoring production.

“A weaker dollar supports U.S. manufacturing competitiveness,” said Diane Swonk, chief economist at KPMG US. “But volatility makes long-term capital decisions harder, especially when equipment is imported.”

That tension is already visible on factory floors.

“We’re seeing stronger international orders,” said Mark Wallace, CFO of a West Michigan industrial manufacturer. “At the same time, we’re delaying some equipment purchases because currency swings can significantly raise capital costs.”

Tourism & Hospitality: Michigan’s Clear Winner

Tourism stands out as the most direct beneficiary of a weaker dollar.

International visitors—particularly from Canada—are finding Michigan more affordable, boosting hotels, restaurants, attractions, and regional airports. Northern Michigan, Detroit, and Lake Michigan shoreline destinations are seeing stronger bookings and renewed pricing power.

“When the dollar weakens, the U.S. becomes a bargain destination almost overnight,” said Jay Bryson, chief economist at Wells Fargo. “Michigan is well positioned to capture that demand.”

International travel by Michigan residents has become more expensive, but that is keeping discretionary spending closer to home.

“We’re seeing a noticeable lift in inbound bookings,” said Sarah Johnson, finance director for a Michigan-based hospitality group. “The weaker dollar is helping fill rooms and extend stays.”

Agriculture & Agribusiness: Stronger Exports, Higher Inputs

Michigan agriculture is seeing a familiar pattern: export opportunity paired with rising costs.

Corn, soybeans, dairy products, and processed foods are more competitive globally, supporting farm revenues and agribusiness exports. But globally priced inputs—fertilizer, fuel, chemicals, and equipment—are also getting more expensive.

“A weaker dollar boosts exports, but it raises costs at the same time,” said Scott Irwin, an agricultural economist at the University of Illinois. “Margins depend on how well producers manage that spread.”

“For export-oriented growers, this environment is mostly positive,” said Tom Beasley, CFO of a Michigan agribusiness cooperative. “But cost control is critical. You can give back gains quickly if you’re not careful.”

Export Benefits vs. Cost Pressures

The second chart illustrates why the dollar’s impact varies by sector. Tourism shows strong export benefit with limited cost pressure, while automotive and agriculture face a more balanced tug-of-war between gains and expenses.

How Michigan Executives Are Responding

Across industries, Michigan CFOs and executives are taking similar steps:

• Expanding currency hedging programs

• Renegotiating supplier contracts

• Accelerating North American sourcing

• Baking currency assumptions into 2026 budgets

“This is where disciplined financial management matters,” Zandi said. “Companies that actively manage currency risk will outperform those that don’t.”

Bottom Line

A weaker dollar is neither a universal boost nor a broad threat for Michigan—it is a reallocation of advantage.

• Clear winners: Tourism and export-driven manufacturers

• Mixed outcomes: Automotive and agriculture

• Biggest risk: Import-heavy businesses with thin margins

As 2026 unfolds, Michigan companies that treat currency volatility as a strategic variable—rather than a background statistic—will be best positioned to turn global uncertainty into local opportunity.