UM Economists Predict 28,000 New Jobs for Oakland County

Posted on April 28, 2011

Oakland County can expect to add nearly 28,000 mostly well-paying jobs through 2013 — but the recovery faces several threats from energy prices, supply-chain interruption and population declines, according to an economic forecast prepared by the University of Michigan.

The annual economic outlook, released today by the UM Institute for Research on Labor, Employment, and the Economy, reported the county saw a net loss of 1,148 jobs in 2010 on a yearly average basis compared with 2009. But Oakland added more than 12,000 jobs when comparing the fourth-quarter average labor force with the same quarter a year earlier.

UM economists George Fulton and Don Grimes predict the county will add nearly 11,000 jobs by the end of this year and about 17,000 more jobs the following two years.

More than half are expected to be in business and professional services by late 2013, while manufacturing will add 4,586 jobs over the same period including 2,745 new automotive jobs, according to the annual report prepared for Oakland County. Most of the manufacturing jobs are expected to be added this year.

“The forecast is for a slower recovery than we’ve seen in some past expansions, but the county and region can expect to grow and add (jobs),” Fulton said. “And this time, with the participation of manufacturing.”

The report also projects that U.S. light vehicle sales will climb from 11.5 million units in 2010 to 13.4 million this year and 15.8 million by 2013, with the Detroit 3 automakers maintaining a market share at just under 45 percent.

More than 14,000 of the new jobs added by 2013 will be in business and professional services, such as legal, architectural, engineering, accounting, advertising, management and technical consulting. The jobs have an average annual salary of $65,517, according to the report.

About 3,900 more will be in health care services at an average $47,485, and 3,100 more in wholesale trade jobs at an average wage of $76,533. The real estate and construction industries were also expected to see modest job gains by 2013.

Financial and insurance services, and total government employment, were expected to be the largest job-losers in Oakland over same period, shedding more than 2,000 positions in each category.

“I actually consider that (loss of government jobs) to be another positive category (in the report). I do not want government to be showing growth,” said Oakland County Executive L. Brooks Patterson. “Government does not add jobs, if anything it saps the strength of those employers who could otherwise add some jobs.”

Patterson also said the county has come a long way back from 2009, when it posted a record-setting net loss of 60,000 jobs amid the global lending market collapse and bankruptcies of General Motors Co. and Chrysler Group LLC.

He also said today’s labor force is somewhat more diversified because of growth and economic attraction among knowledge-economy employers, which could help the county participate in future growth and insulate it against some downturns.

There were still a few dark clouds on the horizon. Fulton and Grimes predicted a 10 percent reduction or interruptions in production from Japan because of the tsunami, and related damage could negatively impact growth by as much as 1,000 jobs during 2011. But Fulton called that risk a moderate one and said it could help the Detroit 3 gain short-term U.S. market share against Asian competitors.

Another threat was brain drain and population declines. Oakland County saw only 0.7 percent total population growth to just over 1.2 million in 2010, according to recent U.S. Census data, and several inner-ring suburbs of Detroit saw a net loss in population.

“People do leave, or they leave the labor force after a major economic impact,” Grimes said. “But there is also a local growth in the number of self-employed, which not all of (the report data) tracks.”

Oakland also saw a record-breaking 10,200 residential foreclosures in 2010, but Patterson said some partial-year numbers indicate 2011 is on a slower pace so far this year, and several local initiatives like the launch of the new Oakland University medical school could help curb brain drain.

By Chad Halcom, Crain’s Detroit