Oakland County’s Economic Outlook Luncheon, celebrating the positive economic forecast prepared by University of Michigan economists George Fulton and Donald Grimes, was held at the Detroit Marriott Troy on May 1 and had plenty of good news to share.
Now entering its fifth year of recovery, Oakland County is leaving the 2008-09 recession firmly behind in its rearview mirror.
After bursting out of the recession with more than 65,000 new jobs over the past three years, the Oakland economy will add nearly 43,000 jobs through 2016—11,000 jobs this year, 15,000 next year and 17,000 the year after, say University of Michigan economists. And for the first time since 2003, Oakland’s unemployment rate will fall below the national average this year, dropping to 5 percent by 2016.
“We see the continuation of a healthy recovery through 2016, extending its span to seven years, but with the pace of growth moderating a little more this year and accelerating again in the following two years,” said economist George Fulton. “Oakland’s recovery is supported by an expanding U.S. economy, a recovering local housing sector and increasing vehicle sales, with the Detroit Three fully participating.
“All of this is backed by the county’s strong economic fundamentals and forward-looking policy initiatives.”
In their annual forecast of the Oakland County economy, Fulton and colleague Don Grimes of the U-M Institute for Research on Labor, Employment, and the Economy say that the strength of the Oakland economy has traditionally concentrated in the area of high-wage, white-collar professional services—21,500 new jobs and 28 percent growth from 2009 to 2013.
And they expect this industry to continue to grow over the next three years, albeit at a more subdued growth rate (11,000 new jobs at 11 percent growth). Job growth in professional services will be concentrated in engineering services (4,500 jobs) and testing labs (2,300 jobs), and along with company management jobs (2,000 new jobs), form the core of the white-collar auto industry.
“All of them are forecast to add many more jobs than the blue-collar factory-based part of the auto industry,” Fulton said. “Indeed, Oakland County’s auto industry is the best example of how the industry is converting from a factory-based industry to an office-based enterprise.”
In addition to these high-paying professional services jobs, other private service-providing industries that will see solid growth include health care (6,300 jobs); leisure and hospitality (3,800 jobs); administrative support and waste management (3,400 jobs); finance, insurance and real estate (2,800 jobs); and wholesale and retail trade (both at about 2,200 jobs).
In the high-wage goods-producing sector, Fulton and Grimes predict jobs gains of 5,200 over the next three years—split fairly evenly between manufacturing and construction.
“Over the next three years, the manufacturing sector in Oakland County contributes only one out of every 17 jobs added in the county over this period,” Grimes said. “By 2016, the manufacturing sector accounts for less than 9 percent of the jobs in the county. We expect that its share will continue to slip.”
In particular, motor vehicle manufacturing, which led the early stages of the recovery in 2011 and 2012, will add only about 700 jobs over the next three years, accounting for less than 3 percent of all jobs in Oakland County.
Fortunately, Oakland has invested for years in many of the industries that are becoming increasingly prominent in the knowledge economy—namely professional services that are closely identified with the auto industry, Fulton and Grimes say.
Overall, Oakland County remains among the best local economies in the nation, ranking 11th among 36 U.S. counties of comparable size on a series of measures that indicate future economic prosperity.
The real and projected job gains of 122,000 from 2010 through 2016 means that the county will have replenished 73 percent of jobs lost from summer 2000 to the end of 2009.
The 29th annual U-M forecast of Oakland County’s economy was sponsored by seven regional organizations. Its presentation was hosted by the county’s Department of Economic Development & Community Affairs, Oakland Community College and Chase.