Oakland County will rebound with modest job growth

ANN ARBOR—Oakland County’s economy will recover from four straight years of job losses by adding more than 36,000 new jobs by the end of 2007, University of Michigan economists predict.

The county will gain 10,400 jobs this year, 12,100 next year and 13,900 jobs in 2007, after losing more than 52,000 jobs in 2001-04, they say.

“Although a significant and welcome improvement over the past four years, job growth remains moderate over the next three years, especially compared with the vibrant 1991-2000 period when Oakland averaged impressive gains of 21,600 jobs per year,” said George Fulton, an economist at the U-M Institute of Labor and Industrial Relations (ILIR), part of the University’s Ross School of Business and the School of Social Work.

“The outlook for the county is consistent with our expectations of solid and sustained growth in the U.S. economy over the forecast period, combined with moderations in the productivity growth that has curtailed hiring in recent years and some slowing of manufacturing’s free fall since 2000.”

In their just-released annual forecast of the Oakland County economy, Fulton and ILIR colleague Don Grimes say that nearly all of the new private-sector jobs in the next three years will be in the service-providing sector—professional and business services (13,000 new jobs); private education and health services (8,300 new jobs); trade, transportation and utilities (4,700 new jobs); leisure and hospitality (4,200 new jobs); financial activities (4,000 new jobs); and information (1,200 new jobs).

“High-wage, high-education industries such as wholesale trade, information services, finance, corporate headquarters and professional, scientific and technical services will create nearly a third of all net job gains in the county,” Grimes said. “On the other hand, relatively low-wage and low-education retail trade stores, leisure and hospitality services, and other services will account for 20 percent of all net job gains.”

Fulton and Grimes say that the goods-producing sector will lose about 500 jobs overall in the next three years. Though nearly 2,000 new jobs will be created in construction, some 2,500 manufacturing jobs—mostly automotive-related—will disappear.

“The continued employment decline in motor vehicle manufacturing, which lost 14,500 jobs between 2000 and 2004 in Oakland County, reflects productivity growth, the loss of market share by Ford and General Motors and the shift of parts production to lower-cost producers,” Grimes said.

Despite overall job losses in recent years and modest job growth projected through at least 2007, Oakland County has been successful in replacing lost high-paying manufacturing jobs with high-paying, highly skilled jobs in emerging technology-based industries, the economists say.

High-paying jobs that require higher education have increased since 1990 and now make up 28 percent of local jobs—the largest single portion of the Oakland economy. In contrast, high-wage/low-education employment (mostly manufacturing) has fallen in the past 15 years and now comprises 13 percent of Oakland County jobs. Low-wage/low-education jobs also have declined during that time and now account for 22 percent of local jobs.

“Oakland County has been one of the most successful localities in Michigan, indeed the most successful, in making the transition from the traditional industrial economy to a knowledge-based economy,” Fulton said. “The credit goes to the outreach efforts of the institutions of higher education in the area, the entrepreneurial spirit of the local business and financial communities and the vision and execution by the leadership in county government—which, through the creation of programs such as Automation Alley, has helped show the way to a more prosperous future for southeast Michigan.”

The 20th annual U-M forecast of Oakland County’s economy was sponsored by 13 Oakland County organizations. Its presentation was hosted by the county’s Planning & Economic Development Services Division; Bank One, Michigan; and Oakland Community College.

Related links:

U-M Institute of Labor and Industrial Relations

Oakland County