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Oakland County Turns Corner, Returns to Sustained Job Growth

4/29/2004 --

County¿s unemployment rate expected to decline from 5.2 percent in 2003 to 4.2 percent in 2006.

ANN ARBOR, Mich. – Oakland County will gain nearly 46,000 jobs from the end of last year through 2006---recouping most of the county's job losses of the past three years, say University of Michigan economists.

The county will gain 15,600 jobs from the end of 2003 to the end of this year, add another 16,400 jobs by the end of next year and an additional 13,800 workers by the end of 2006, they say.

"Has the Oakland economy turned the corner and is it returning to a regime of sustained growth? Our answer is yes and yes," said George Fulton, an economist at the U-M Institute of Labor and Industrial Relations (ILIR), part of the University's Business School and School of Social Work. "The county economy began gaining jobs at the end of last year and will continue to add jobs from there.

"With this renewed job growth, the unemployment rate declines a full percentage point, from 5.2 percent in 2003 to 4.2 percent in 2006---about half a percentage point below the rates forecast for the nation through 2006."

In their annual forecast of the Oakland County economy, Fulton and ILIR colleague Don Grimes say that more than 90 percent of the new private-sector jobs in the next three years will be in the service-providing sector---professional and business services (15,200 new jobs); financial activities (5,900 new jobs); private education and health services (4,600 new jobs); trade, transportation and utilities (4,400 new jobs); and leisure and hospitality (4,100 new jobs).

"Conventional wisdom views this sector generally as being made up of low-wage jobs," Fulton said. "To the contrary, within this sector there are wide variations in earnings, including high-, middle- and low-wage industries."

According to the forecast, the major industry categories that pay the lowest wages on average---leisure and hospitality services and retail trade---account for only 18 percent of the anticipated job growth over the next three years.

On the other hand, about 40 percent of Oakland's job growth is expected in industries that pay at least as well as the non-automotive manufacturing sector---wholesale trade; financial activities; professional, scientific and technical services; and corporate headquarters.

Fulton and Grimes say that the goods-producing sector will add only 3,400 jobs over the next three years. About two-thirds will be new construction jobs and about a third will be in manufacturing.

They expect the manufacturing sector to lose 500 jobs this year, before adding 1,800 jobs in 2005. Between 2003 and 2006, manufacturing will add only 1,200 net jobs, due primarily to very rapid productivity growth, they say.

"The loss of manufacturing jobs in 2004 is concentrated in motor vehicle manufacturing," Grimes said. "An anticipated addition of shift workers at the Lake Orion Assembly Plant and some added employment at parts facilities will create 1,000 jobs in 2005, but auto employment will remain flat in 2006."

The non-automotive manufacturing sector will add 700 jobs over the next three years, with all of the employment gains taking place in 2005, the economists say. The largest gains will be in machinery (500 jobs), chemicals (400 jobs) and plastics (300 jobs).

Despite overall job losses in recent years, Oakland County still remains one of the most robust economies in Michigan and the nation, Fulton and Grimes say.

Since 1991, private-sector employment in Oakland County has grown nearly 28 percent and has created more private-sector jobs (145,000) than any other area in the state, accounting for 30 percent of the employment gains in Michigan during that time.

In addition, Oakland County ranks among the top 10 in private-sector employment growth and average private-sector wages compared with its "elite peers" around the country---counties with high income and low poverty rates.



For more information, contact:
Bernie DeGroat
(734) 936-1015 or 647-1847
Email: bernied@umich.edu