ANN ARBOR, Mich. – A year after enduring its worst labor market in history, the Oakland County economy will stem the tide of job losses this year before adding jobs in 2011, say University of Michigan economists.
In their annual forecast of the Oakland County economy, George Fulton and Don Grimes of the U-M Institute for Research on Labor, Employment, and the Economy say that Oakland lost an unprecedented 60,000 jobs in 2009—more than the previous five years combined—and will lose another 9,900 jobs this year.
But Oakland County will add 2,400 jobs next year—the most since 2000—and nearly 8,000 jobs in 2012, they say.
“The Oakland County economy has been on a rollercoaster ride during the first decade of the 21st century,” said George Fulton of the U-M Institute for Research on Labor, Employment, and the Economy. “Job loss in the county mushroomed to an unimaginable number in 2009, reflecting the sharp decline in the national economy and the fallout from the shrinkage of the domestic auto industry.
“But the economic situation has stabilized over the past several months, and Oakland County seems once again to be poised for recovery, particularly with its still-strong economic fundamentals and forward-looking policy initiatives intact. The first decade of the 2000s will not soon be forgotten, but all will be pleased to put it in the rearview mirror.”
Fulton and Grimes say that while the next two years are expected to show the strongest performance in a decade for Oakland County, job gains by 2012 will reach only about half of what they averaged from 1980 to 2000 and the county will still have fewer jobs than it had at the end of 2008. Even though the recovery will be slow initially, they believe, however, that Oakland is entering a period of sustained growth beyond 2012.
“The economy is healing, but it is going to be a relatively long convalescence, and for the unemployed, it will continue to be painful,” Fulton said.
According to the forecast, the goods-producing sector, which includes manufacturing, construction and other industries, will lose 3,400 jobs this year, but will add 1,200 jobs in 2011 and 2,100 in 2012. Motor vehicle and parts manufacturing will account for many of the job gains in this sector, thanks to the re-opening of the Lake Orion assembly plant in 2011.
Although the private service-providing sector will lose nearly 5,400 jobs this year, more than 2,100 jobs will be added next year and 6,000 more will be created in 2012. Nearly all of the job gains in this sector over the next two years will occur in professional and business services (3,600 jobs) and private education and health services (3,000 jobs). On the other hand, retail trade, which will lose more than 1,800 jobs this year, will continue to post employment losses next year (600 jobs), before adding a handful of jobs in 2012.
In the government sector, which includes public schools and local government administration, more than 1,100 jobs will be lost over the next two years, matching the amount of losses that are expected this year alone.
“With the exception of motor vehicle manufacturing, employment services and home health care services, all of the higher-growth industries, regardless of sector, tend to employ a greater percentage of workers with higher levels of educational attainment,” Grimes said. “Information technology and health care service industries are particularly well-represented among the growing industries.”
Despite the economic difficulties of the past decade, Oakland County still remains among the premier local economies in the country, with its coveted AAA bond rating and high ranking among 33 comparable counties in the United States on a series of measures that indicate future economic prosperity.
“Oakland ranks 6th overall among the comparable counties—an impressive standing, especially considering that the five counties with a higher ranking are all among the most thriving local economies in the nation,” Grimes said. “Oakland County has survived the economic turbulence of the past decade, and appears to have positioned itself for a much brighter future in the next decade.”
The 25th annual U-M forecast of Oakland County’s economy was sponsored by 10 Oakland County organizations. Its presentation was hosted by the county’s Department of Economic Development & Community Affairs, Chase and Oakland Community College.