Economists at the University of Michigan predict a growing state economy will create more than 130,000 jobs in Michigan in the next two years.
“Michigan has performed exceedingly well compared with the nation and most other states in private-sector job growth recently, particularly in industries at the better-compensated end of the wage scale,” says George Fulton, director of U-M’s Research Seminar in Quantitative Economics. “The state is making inroads to replenishing the severe losses it suffered during the opening of the 2000s.”
Since 2010, Michigan gained more than a 250,000 jobs, with 80,000 jobs this year alone. Fulton says that the state experienced a healthy year of growth in 2013, as it saw the second largest gain in jobs since 1999.
These findings follow the Research Seminar’s U.S. forecast, which predicts the creation of more than five million jobs over the next two years, with the nation’s unemployment rate falling to 6 percent by 2015. Daniil Manaenkov and Matthew Hall at U-M say overall economic output growth will rise from this year’s 1.7 percent to 3.1 percent in 2015 — above 3 percent for the first time in 10 years.
“Despite a seemingly heavy burden of domestic fiscal austerity and monetary slip-ups, the U.S. economy has demonstrated remarkable resilience,” Manaenkov says. “This makes us hopeful that once fiscal headwinds abate, we will see a meaningful acceleration of GDP and payroll job gains.”
The forecast also makes note of a recovering housing market. Construction of new homes will increase from to 1.2 million next year (921,000 in 2013) and nearly 1.5 million in 2015. Sales of existing single-family homes are expected to increase from 4.6 million this year to 5.2 million in 2015.
“The housing sector is expected to be a solid contributor to growth in the next two years, reflecting an anticipated increase in household formation, as well as rising incomes,” Manaenkov says. “We expect that with affordable rates and an improved payroll outlook, housing construction will accelerate next year.”â€¨
The researchers say oil should stay around $95/barrel through 2015, with light-vehicle sales steadily rising from 15.5 million units this year to 16 million next year and 16.3 million in 2015.
“Strength in domestically produced vehicles has helped drive the sales recovery since 2009,” Hall says “And pent-up demand remains strong. The average age of vehicles on the road has continued to rise, and younger drivers, who are more likely to be unemployed or debt-constrained, have been underrepresented in the market to date.
“Together, these facts suggest further growth in vehicle sales in the coming year, as unemployment continues to fall.”
To read the full U.S. and Michigan reports, click here.