ANN ARBOR—Despite difficulties in the auto industry and the slumping housing market, Oakland County’s economy will continue to improve, say University of Michigan economists.

In their annual forecast of the Oakland County economy, George Fulton and Don Grimes of the U-M Institute of Labor and Industrial Relations say that Oakland will lose 4,400 jobs this year, after losing 4,800 jobs last year and an all-time high 18,500 in 2006.

“With the current weakness in the national economy, auto restructuring yet to run its course and the downturn in housing persisting, 2008 is not expected to show much improvement over last year,” Fulton said.

However, he and Grimes predict that the county will soon be back in the black, netting 1,200 new jobs next year and 5,600 in 2010—the first years of back-to-back job growth since 1999-2000.

“In general, the improvement is a tribute to the underlying resiliency of the Oakland County economy,” Fulton said. “Current conditions notwithstanding, Oakland is still one of most successful counties in the nation, with every reason to expect a bright future.”

According to Fulton and Grimes, health care and professional and business services will account for the bulk of the job gains in 2009 and 2010. Health care will add 4,100 jobs in the next two years, mostly in hospitals, doctors’ offices and home health care services.

Employment in professional and business services will increase by 5,500 jobs in the next two years, with about 60 percent of those coming in employment services and 35 percent in professional, scientific and technical positions. Private education and information industries, such as software publishing and wireless telecommunications, will also post job gains.

Other service-providing industries will not fare as well. Major job losers include retail trade, financial industries tied to the housing market, corporate headquarters, and leisure and hospitality services.

Although Oakland County will continue to lose manufacturing jobs in 2009, the rate of loss will significantly slow—from 2,900 job losses in the current year to 1,100 next year. In 2010, the county is even expected to add 100 new manufacturing jobs overall.

Auto manufacturing, in particular, will lose another 1,700 jobs this year, but only 300 in 2009 and will actually gain 100 jobs in 2010—but by then, local auto manufacturing will employ about half the number it did in 2000.

Construction also will continue to lose jobs, down 900 this year and another 900 over the next two years.

In spite of historic downsizing in the U.S. auto industry and the downtrodden housing market, Oakland County is already out front in developing programs to transition away from its industrial roots and preparing to accommodate an aging populace, Fulton and Grimes say.

“The Emerging Sectors business attraction and retention strategy and Automation Alley, Oakland’s well-established business technology association, have taken hold as hallmarks of the county’s image as a player in the New Economy,” Grimes said. “Also, the creation of a medical school at Oakland University will help meet the demand for health care services and encourage the development of medical research-related businesses.”

As Oakland County continues to shift away from goods-producing industries to ones that provide services, from the manufacturing sector to health care and from low-education industries to those that require high levels of knowledge, it is well positioned to sustain its prosperity for years to come, the U-M economists say.

“Looking beyond 2010, it is apparent that Oakland County will face a variety of new challenges and opportunities—slower population growth, an aging population, a declining prime-working-age population,” Grimes said. “The limitations on workforce growth highlight the critical importance of enhancing its productivity through education and training.

“This is not a challenge unique to Oakland County. Most communities in this country will face this trend in varying degrees, and how they respond will go a long way toward shaping their economic prospects over the next few decades. In Oakland’s case, its affluent, well-educated community will continue to be its own best resource for maintaining a thriving economy.”

The 23rd annual U-M forecast of Oakland County’s economy was sponsored by 13 Oakland County organizations. Its presentation was hosted by the county’s Department of Economic Development & Community Affairs, Chase and Oakland Community College.