Oakland’s economic resurgence continues
ANN ARBOR—On the heels of its strongest two-year job growth in almost 20 years, Oakland County’s economy will add nearly 42,000 jobs through 2015, say University of Michigan economists.
After gaining 48,000 jobs during 2011 and 2012—Oakland’s best back-to-back years since 1994-95—the county will add 11,600 jobs this year, 13,300 next year and 16,700 in 2015.
“Oakland’s recovery is becoming as remarkable as the retrenchment that preceded it,” said economist George Fulton. “Since the recession’s low point at the end of 2009, the recovery has been red-hot with a growth rate averaging 3.8 percent per year in 2011 and 2012. We see the continuation of a solid recovery through 2015, extending its span to six years, but with job growth moderating from its sizzling pace of the past two years.”
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 high-wage industries—with average pay of more than $62,000—accounted for more than half of the new private-sector jobs created during the recovery, a trend that will continue throughout the forecast horizon.
“That the past two years were special is reinforced by the finding that private-sector job gains well exceeded what they averaged per year over the 1980-2000 period, prior to the extended weakness of the 2000s,” Fulton said. “The more moderate job gains we are forecasting over the next three years fall a little below that benchmark in 2013 and 2014, but a little above in 2015.”
According to the forecast, the private service-providing sector will add 35,000 jobs through 2015. More than 40 percent of these job gains (15,500) will be in professional and business services, with another 5,300 new jobs in health services, 5,300 more in wholesale and retail trade, 4,100 in leisure and hospitality, and 2,300 in finance, insurance and real estate.
Job growth in professional and business services over the next three years will be concentrated in engineering services, employment services, computer systems design, corporation management and testing laboratories, the economists say.
“With the exception of employment services, all of these are high-paying industries that mostly employ people with college degrees,” Grimes said.
In the goods-producing sector, which includes manufacturing and construction, Fulton and Grimes predict jobs gains of nearly 7,000 over the next three years. About 4,100 jobs will be added in manufacturing—including 1,400 in motor vehicle manufacturing—and 2,700 in construction.
“The more modest job growth in manufacturing reflects a typical recovery from a severe recession—rapid job gains in the immediate recovery period followed by more modest gains,” Grimes said. “Within the construction industry, most of the job gains are the result of increased residential construction activity, while industrial and commercial construction improves at a more modest pace.”
Unlike the private sector in Oakland County, in which every major industry division will gain jobs this year and in each of the next two years, the government sector (which includes public education) will continue to suffer job losses—but at a much slower rate compared with the previous six years—until finally adding more than 200 jobs in 2015.
Overall, Fulton and Grimes say that Oakland remains among the better local economies in the nation, ranking 10th among 36 comparable U.S. counties on a series of measures that indicate future economic prosperity.
The real and projected job gains from the end of 2009 through 2015 means that the county will have replenished 62 percent, or about five in eight, of the jobs lost from summer 2000 to the end of 2009.
“This is good progress, indeed, but it leaves some ground to make up,” Fulton said. “The county, however, is especially noteworthy for its share of residents employed in professional and managerial occupations and for its residents’ high level of education, both of which bode well for future growth opportunities in higher-paid activities.
“Whether we assess Oakland County with respect to how it is positioned in key economic fundamentals across all regions of the United States or more restrictively among many of the elite local economies, it is hard not to see the county thriving as time goes on.”
The 28th annual U-M forecast of Oakland County’s economy was sponsored by nine regional organizations. Its presentation was hosted by the county’s Department of Economic Development & Community Affairs, Oakland Community College and Chase.