According to a new annual forecast by the University of Michigan in Ann Arbor, Oakland County is rebounding from the pandemic and recession with a decline in jobless rates and rising wages, though inflation, the war in Ukraine, and other factors still pose economic risks.
Oakland County is expected to surpass its pre-COVID-19 employment level during the third quarter of this year and see its unemployment rate drop below 3 percent by the end of 2024 — nearly a half percentage point below its average level in 2019.
In its annual forecast of the Oakland County economy, the U-M Research Seminar in Quantitative Economics predicts the number of jobs will grow by 4.3 percent this year, 2.9 percent in 2023, and 1.7 percent in 2024. The county’s payroll jobs count in 2024 is forecast to exceed the 2019 level by about 12,500 jobs, the report says.
Oakland lost 148,900 jobs, or 20 percent of its payroll employment, in the second quarter of 2020. By the third quarter of 2021, the county had regained more than two-thirds of that loss.
Up to that point, Oakland’s recovery was roughly on par with the state of Michigan, but economists expect the county’s job growth to outpace the state by 2024. As of February, the county’s unemployment rate stood at 3.8 percent, down from the nearly 20 percent reached in May 2020.
“Oakland County’s recovery highlights its strengths as a region, including its educated workforce and focus on 21st-century manufacturing and engineering,” says Gabriel Ehrlich, director of U-M’s RSQE.
Blue-collar industries are expected to be among the quickest to recover: By the end of 2024, economists expect that the job count within that sector will be 5.1 percent higher than the pre-pandemic level. Higher educational attainment jobs are expected to see a slight pickup — about 2.1 percent over the pre-pandemic level by the end of 2024 — but that sector also lost comparatively fewer jobs, researchers say.
The lower educational attainment services sector, which fared the worst during the pandemic, is forecast to return to its pre-pandemic levels during the first half of 2024 and exceed those levels by 1.1 percent by the end of that year. That expectation is brighter than for the state overall, where the outlook for those service jobs are 1.9 percent below their pre-pandemic levels by the end of 2024.
U-M economists say they are seeing a stronger recovery for the county than Michigan overall because of a relatively larger private sector that’s grown more quickly than the government sector, a tighter labor market, and strong uptake in federal pandemic relief efforts designed to help small businesses continue to pay their workers.
Oakland ranked first among Michigan counties on nearly every metric in the Paycheck Protection Program, including total funds, funds per resident, local jobs supported, and total loan forgiveness.
In all, more than 1 in 5 of Michigan’s dollars from that program went to Oakland businesses.
The economists forecast the county’s average real wage to resume growth through 2024, finishing the period with an average wage of $71,700 in 2021 dollars, or about 7 percent above the pre-pandemic level. That’s despite inflation currently running at its fastest pace in 40 years.
They expect inflation to remain uncomfortably high in the near term as the recent spike in gas prices reinforces trends, though they note improving supply chains and contractionary fiscal and monetary policy should lead to some inflationary easing later this year.
Researchers also examined regional computer- and math-aided jobs and found the county and the rest of the Detroit region has a slightly higher share of related jobs than the nation, but the median wage for those occupations is well below the national average — even after adjusting for differences in the cost of living.
For the region “to remain the research brain” of an increasingly computerized automotive industry, economists say, leaders will need to make wages more competitive.
The 37th annual U-M forecast of Oakland County’s economy was hosted by the county’s Department of Economic Development.
IN RELATED NEWS, Oakland County earned a AAA bond rating this week from Moody’s Ratings Services and Standard & Poor’s for its $5.4 million Oakland County Oakland Township Water Supply System Improvements Bonds, Series 2022.
“The ratings agencies reaffirmed our budgeting practices and how we’ve managed our economy through challenging times,” says Dave Coulter, Oakland County executive. “We are in all ways, moving the county forward.”
The Oakland County Water Resources Commissioner’s office operates and maintains Oakland Township’s seven Type 1 water systems. The bonds will finance the construction of a new ground water storage tank facility and the required pumps, generators, control systems, and site improvements to operate the systems. When construction is complete, Oakland Township will meet the Michigan Department of Environment, Great Lakes and Energy’s (EGLE) requirements for water systems with more than 150 living units.
“The ongoing collaboration with County Executive Coulter and Commissioner Nash and our unwavering commitment to safeguard taxpayer dollars and revive our economy, enables us to retain our exemplary bond rating and improve our water supply system,” says Robert Wittenberg, Oakland County treasurer.
“The Treasurer’s Office’s efforts to optimize our investment yields, help Oakland County residents and business owners retain their properties, and solid delinquent tax collections contributed to the county’s strong cash position and liquidity.”
The Oakland County Oakland Township Water Supply System Improvements Bonds, Series 2022 will bond for 30 years to reduce the impact of the annual rate increases to the township’s 780 water customers. The bonds go on sale on May 11.
“My office is proud to be a part of this project and to have the ability to reduce the rates for Oakland Township residents over time,” says Jim Nash, Oakland County water resources commissioner. “In collaboration with the township, we are confident this solution will allow for additional capacity while helping us protect the environment regionally during heavy rains.”