Economic freefall for county is over, say U-M economists
Published May 2, 2013
The Oakland County economy and Oakland County Executive L. Brooks Patterson appeared to be recovering nicely at the Oakland County Community Outlook luncheon held at the Marriott Detroit in Troy April 25.
Patterson, recovering from an auto accident in August, noted that it was his 21st outlook luncheon.
“We have good numbers to share,” he said.
Oakland County is in its fourth year of economic recovery, said economist George Fulton, of the University of Michigan Institute for Research, Labor, Employment and the Economy. He and Donald Grimes, also of the U-M institute, ran the numbers for Oakland County going forward to a sold-out crowd at the 28th annual U-M economic forecast luncheon for Oakland County.
“2012 turned out to be another red-hot year,” Fulton said.
The last two years have been the county’s strongest job growth since 1994-95, gaining 48,000 jobs, with the strongest growth in 2011, Fulton said.
He said solid recovery will continue through 2015, with a projected 11,581 jobs added this year, 13,325 in 2014 and 16,688 in 2015.
This is in sharp contrast to 2009, when more than 59,000 jobs were lost in Oakland County.
Of the jobs projected to be added through 2015, more than half of the new ones will be in high-wage industries paying more than $62,000, and more than 40 percent will be in the professional and business services. Health services will add 5,300 jobs, and the same number will be added in the wholesale and retail sectors; 4,100 jobs will be added in leisure and hospitality; and 2,300 will be added in finance, insurance and real estate through 2015, according to the forecast.
The professional and business service jobs will be concentrated in engineering services, employment services, computer systems design, corporate management and testing laboratories, Grimes and Fulton said.
The manufacturing and construction industries will post job gains of about 7,000 over the next three years, with about 1,400 in car manufacturing, according to the report. The projected job gains from 2009 through 2015 represent replacement of five of every eight jobs lost.
Sales for the Detroit car companies will continue to increase for the next three years, but at a slower pace than the last two years, Fulton said.
“Growth in the county greatly exceeded our fondest hopes,” Grimes said. “This is as good of news as you could have hoped for.” He noted that most of the expansion has and will likely continue to be in existing firms.
As the baby boomer population — those born between 1946 and 1960 — which is highly represented in Oakland County, continues to age, there will be a labor shortage, Fulton said. “This one, we see coming.”
Patterson pointed out that students from around the country attend the new medical school at Oakland University, and 80 percent of those students are expected to stay in the state, within 100 miles of the medical school, upon graduation.
Unemployment in Oakland County dropped to 8.2 percent in 2013 from 8.7 percent in 2012. It’s projected to drop further, to 7.7 percent in 2014 and to 6.9 percent in 2015, Fulton said. In 2009, Oakland County’s unemployment rate was 12.9 percent, compared to the U.S. rate of 9.3 percent.
The housing industry is also turning around, while the office market — with 30 percent vacancy in Troy — will still be very soft for the next three to four years, said Dan Hunter, deputy director of economic development and community affairs for Oakland County. He added that they are starting to see new construction for research and development and light industrial in certain pockets.
Patterson noted that Pontiac has been “in the black” for two years, after services were privatized or taken over by the county and neighboring jurisdiction.
Grimes and Fulton ranked Oakland County against 35 counties across the country of similar size, and Oakland came out 10th on the list using indicators of future economic prosperity. Fulton noted that Oakland’s standing on the list is impressive, given that three of the counties that placed higher than Oakland include Fairfax, Va.; Fairfield, Conn.; and Westchester, N.Y., which are among the wealthiest counties in the country.
“We see a continued solid recovery,” Fulton said.
Fulton and Grimes’ report is available online at www.oakgov.com. Click under “news and events,” then Oakland’s Economic Resurgence Continues.
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