Oakland County job growth to continue outpacing Michigan

April 18, 1997
  • umichnews@umich.edu

ANN ARBOR—Oakland County’s economy, which has grown nearly twice as fast as that of the nation in the 1990s, will continue to lead Michigan in job creation over the next two years, say University of Michigan economists.

“Underlying this comparison is the remarkable fact that a big chunk of Oakland’s growth comes from the manufacturing sector,” says researcher George A. Fulton of the U-M Institute of Labor and Industrial Relations (ILIR). “In the state and the nation, manufacturing employment peaked almost 20 years ago, whereas in Oakland, it is at its highest level ever and indications are that it has not reached its peak yet.”

In their annual forecast of the Oakland County economy, Fulton and colleague Donald R. Grimes project that Oakland County will add 27,000 new private-sector jobs in 1997 and 25,000 in 1998.

Employment growth for 1997 is expected to be the same as it was in 1996, they say, with total private non-farm employment forecast to increase by 4.3 percent. Job growth is anticipated to slow a bit in 1998, but should remain strong, with total private employment projected to expand by 3.7 percent.

In the manufacturing sector, Fulton and Grimes forecast that about 3,000 jobs will be added in each of the next two years, with motor vehicle manufacturing accounting for about a third of those new jobs. The state, meanwhile, is expected to lose jobs both in the auto sector and in manufacturing as a whole.

“The foundation for Oakland’s solid performance in motor vehicles, however, now has a different structure,” Fulton says. “The nature of local jobs in the auto sector has changed dramatically over the years, as white-collar jobs at headquarters and research facilities have increasingly replaced blue-collar factory jobs.”

Other manufacturing industries, such as printing, chemicals, plastics and electrical machinery, are projected to gain a total of 4,000 new jobs by the end of 1998, the forecast shows.

In all, employment growth in manufacturing is expected to increase by 3.1 percent in 1997 and 1.9 percent in 1998, while private non-manufacturing jobs are predicted to rise by 4.6 percent and 4.1 percent, respectively, the researchers say.

Although Oakland County’s strength in manufacturing has been noteworthy, about two-thirds of the job gains in the next two years are expected to occur in two non-manufacturing sectors—retail trade (stores, restaurants and bars), which will add 4,000 jobs each year, and services (business, professional, health and other services), which will add 14,000 new jobs this year and 13,000 next year.

“Most of the job gains in services are in business and professional services, with 9,000 new jobs in both 1997 and 1998,” Grimes says. “We expect that these job gains will be evenly distributed between higher-wage industries such as engineering and computer services, and lower-wage industries such as temporary help services.”

According to the forecast, private-sector employment in Oakland County in the 1990s has expanded about one-and-a-half- times as fast as the state as a whole and will continue that pace through 1998.

“All of the major industry sectors are expected to grow more rapidly in Oakland County than in the rest of Michigan,” Grimes says. “Although Oakland County accounts for only 17 percent of all private employment in the state, we expect that it will account for 28 percent of the gains in private employment in Michigan during the next two years.”

In addition, Fulton and Grimes point out that Oakland County’s 1994 per capita income of $32,413 is the highest in Michigan and among the top 1 percent in the nation (25th out of 3,110 counties).

Compared with 25 other large suburban counties in the United States from 1990 to 1994, Oakland County ranked first by a wide margin in manufacturing employment growth, second in per capita income growth, third in private non-manufacturing employment growth and third in total private non-farm employment growth.

The 12th annual U-M forecast of Oakland County’s economy was sponsored by 23 Oakland County organizations. Its presentation was hosted by the county’s Development and Planning Division, NBD Bank and Oakland Community College.