Steady job growth will continue for seven-county region

The seven-county region of Genesee, Lapeer, Livingston, Macomb, Oakland, St. Clair and Shiawassee will gain more than 76,000 jobs this year through 2015, say University of Michigan economists.

In their annual economic forecast for the Economic Growth Alliance, a partnership of seven Michigan counties north of Detroit, George Fulton and Don Grimes of the U-M Institute for Research on Labor, Employment, and the Economy say the region will add 17,600 jobs this year, 27,200 jobs in 2014 and 31,600 jobs in 2015—on the heels of gaining nearly 75,000 jobs over the past three years.

“The region is starting its fourth year of economic recovery after nearly a decade-long recession,” said Fulton, director of the institute’s Center for Market Labor Research and the Research Seminar in Quantitative Economics at the U-M Department of Economics. “Over the recovery period, the region has improved its competitive position relative to the rest of the nation. Although the pace of job growth has slowed recently, we see a sustained, moderately paced recovery through 2015, extending the recovery period to six years.”

Fulton and Grimes say that the job growth is accompanied by slowly declining unemployment and relatively tame price inflation. The unemployment rate in the region, which has improved each year since 2009, will continue to drop from last year’s 9.4 percent clip to 9.1 percent this year, 8.3 percent next year and 7.3 percent in 2015. Inflation will hover around 2 percent or less throughout the forecast horizon.

According to the forecast, about 78,000 jobs will be created in the private sector through 2015, but about 1,500 government jobs will be lost. Within the private sector, service-providing industries will account for 75 percent of the job gains this year and during the next two years. 

Professional and business services (24,000 jobs); trade, transportation and utilities (14,000 jobs); and private education and health services (10,000 jobs) will register the largest employment gains among the service-providing industries through 2015. 

“The professional and business services category includes a wide range of industries from legal and engineering to temporary help,” said Grimes, assistant director of the Center for Labor Market Research. “Much of the growth recently has come from well-compensated and higher-educated professional and scientific activities, but all components benefit from an improved commercial environment.

“In the trade-transportation-utilities grouping, wholesale trade, trucking and warehousing continue to benefit from their tie-ins to the expanding manufacturing sector, and in addition, we see some modest recovery in retail trade.”

The goods-producing sector will contribute the other 25 percent of job gains through 2015—about 14,000 jobs in manufacturing and 5,000 in construction.

“Many of the manufacturing job additions over the next three years are directly attributable to the auto industry, and many of the rest derive from auto-related industries,” Grimes said. “Because the auto industry is so extensively networked in the region, the effects of its direct contributions to job growth also spill over into other parts of the private sector.”

Although all of the member counties of the Economic Growth Alliance will see job growth and declining unemployment rates through 2015, there is variation among them, the U-M economists say. The largest number of jobs gained is in Oakland County, 60 percent of the region’s total.

Job gains on a percentage basis for each county per year are: Lapeer (3.6 percent), Livingston (3.5 percent), Oakland (2.3 percent), Shiawassee (2.1 percent), St. Clair (2.1 percent), Macomb (1.8 percent) and Genesee (0.9 percent). 

By the end of last year, Livingston had recovered all of the jobs it lost during the recession, and Lapeer is expected to do so by early 2015.

“For the rest of the counties and the region as a whole, there is a long way to go before making up for the job loss suffered during the past recession,” Fulton said. “If our forecast proves correct, just under 60 percent of the job decline suffered during the ‘lost decade’ will be replenished by the end of 2015. So, we have a ways to go, but we’re seeing forward progress nonetheless.”

The Economic Growth Alliance was formed in recognition of the seven-county region’s influence as an economic unit of interrelated counties whose impact is greater than its individual parts, and where regional cooperation is integral to promoting the area’s economic development initiatives.

U-M Institute for Research on Labor, Employment, and the Economy: http://www.irlee.umich.edu/clmr 

U-M Research Seminar in Quantitative Economics: http://www.rsqe.econ.lsa.umich.edu