ANN ARBOR—The tide of job losses that began in Wayne County last year will be stemmed this spring as the county begins a slow recovery from the national recession, University of Michigan economic researchers say. Although Wayne County will still lose 2,000 jobs overall next year, employment gains will pick up in the second half of 2003 and 4,000 jobs will be added to the economy in 2004, the researchers predict. This follows a decline of 15,000 private-sector jobs in the county in 2001 and an expected loss of 13,000 jobs this year. The current drop in employment, however, is not as severe as it was during the last recession a decade ago when nearly 60,000 jobs were lost from 1989 until 1992, the researchers say. "While this may not be much consolation to the people who have lost their jobs, we expect local job loss in the current period to be about half as severe as the earlier recession," says George A. Fulton, an economist at the U-M Institute of Labor and Industrial Relations (ILIR). "The county is weathering the recession much better than it did in the early 1990s." In their annual forecast of the Wayne County economy, Fulton and fellow ILIR economist Donald R. Grimes say that the manufacturing sector will continue to be the hardest hit, losing 10,000 jobs between 2001 and 2004. The auto industry is expected to lose about 4,000 jobs during that time, mostly because of white-collar layoffs. Fulton and Grimes note that despite these job losses, the auto industry in Wayne County is expected to employ 3,000 more workers in 2004 than in 1992, while auto industry employment in the entire state will be up only 2,000 jobs compared with a decade ago. "This means that a larger share of automobile activity in the state of Michigan is being concentrated in Wayne County and the entire Detroit metropolitan area," Grimes says. "This reflects the growing importance of white-collar research and development activity in the auto industry and the comparative advantage of southeast Michigan in this type of activity." In non-automotive manufacturing, job losses again will be most severe in machinery manufacturing, where employment is expected to decline by 1,300 jobs this year and by 700 jobs over the next two years—after losing 3,100 jobs last year. Employment in most non-manufacturing sectors, such as construction, wholesale and retail trade, and finance and insurance, will hold relatively steady over the next two years, the forecast shows. The services industry is expected to lose 3,000 jobs this year, before adding 1,000 jobs next year and 3,000 more in 2004. Within this sector, industries that provide services to businesses (e.g., engineering, computer programming and temporary help services) will see employment growth, while those that service local residents (e.g., health, personal and repair services) will not, Fulton and Grimes say. "Growth in business services is very beneficial to the long-run outlook for Wayne County since they tend to also provide services to businesses that are located outside the county and are part of the county’s export base, bringing new dollars into the county," Grimes says. Overall, while the county is expected to add only 2,000 jobs in the next two years, its unemployment rate should drop from 7 percent this year to 6 percent in 2004. The main reason for this apparent discrepancy is that the prime working-age population in Wayne County should continue to decline by 15,000 workers over the next three years, the economists say. "Indeed, the problem of finding new workers will be widespread in the United States, but even more acute in Wayne County and the rest of southeast Michigan," Fulton says. "By the end of this decade, it will be as important to economic development in Wayne County and the rest of southeast Michigan to attract new workers as it will be to attract new jobs. This ultimately will be a much more significant source of difficulty than will those caused by fluctuations in the business cycle." Wayne County Executive Ed McNamara says he is pleased with the U-M forecast. "This report confirms that my staff and I are leaving the county in better shape than when I assumed this position. The recent recession was less severe, income growth has been stronger and the long-run prospects look much brighter."