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UM Finds Improved Job Outlook In Six Southeast Counties

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ANN ARBOR — After posting modest job gains last year, the six-county region of Genesee, Lapeer, Livingston, Macomb, Oakland and St. Clair will add more than 50,000 jobs this year through 2013, say University of Michigan economists.

In their second annual economic forecast for the Economic Growth Alliance, a partnership of six southeastern Michigan counties, George Fulton and Don Grimes of the UM Institute for Research on Labor, Employment and the Economy say that the region will gain about 24,000 jobs this year, more than 13,000 jobs in 2012 and another 17,000 the year after.

“Our view is that the recovery in the six-county region that began in 2010 will be sustained over our forecast horizon through 2013,” Fulton said. “We see improved, but not vigorous, growth over the three-year period. The continuation of the recovery is supported by steadily rising vehicle sales and an improved U.S. economy over the next two years. These would be the best years for the local economy since 2000, although as with the nation, they would constitute a slower than usual recovery.”

For historical comparison, the region’s job count at the end of 2013 would be a little below where it was at the end of 2008, before the unprecedented economic crash of 2009.

As a result of the improved job growth, the unemployment rate in the region drops from last year’s 12.9 percent clip to 11.2 percent next year and 10.6 percent by 2013.

“After shrinking for several years, the region’s labor force will begin expanding again starting in 2012, as additional job seekers are drawn in by improving job opportunities,” Fulton said. “This keeps the jobless rate from falling as much as it otherwise would with the employment gains we are projecting.”

According to the forecast, through 2013 all of the net job gains (more than 61,000) will occur in the private sector (nearly 29,000 jobs this year and more than 32,000 total in 2012 and 2013). On the other hand, the financially challenged government sector will continue to lose jobs (about 7,000) over that time.

Within the private sector, service-providing industries will account for two-thirds of the job gains this year and during the next two years. Professional and business services (22,000 jobs), health care and social assistance (8,600 jobs), wholesale and retail trade (5,400 jobs) and leisure and hospitality (3,200 jobs) will register the largest employment gains through 2013.

“Much of the gain in professional and business services in the early stages of the recovery is in its temporary help component, but important gains are also in the much higher wage components of professional, scientific and technical services, and management of companies,” Grimes said.

The goods-producing sector will contribute the other third of job gains over the forecast horizon (about 18,000 in manufacturing and more than 2,000 in construction), producing 37 percent of the gains in the region while accounting for 15 percent of the current work force.

“Over 90 percent of the gains in the goods-producing sector are concentrated in manufacturing, which until 2010 had declined for nine consecutive years,” Grimes said. “The major source of manufacturing’s renaissance in the region is, of course, the motor vehicle industry.

“The bounce in auto employment in 2011 includes the re-opening of the Orion Assembly Plant in Oakland County. The continuation of the auto recovery is anticipated by our forecast of steadily rising vehicle sales through 2013.”

Fulton and Grimes say that in addition to jobs offered by business and government in the six-county region (known as establishment employment), another way to measure employment is to look at household employment, the number of residents who say they are working for themselves or for someone else, either in or outside the region.

Over the entire three-year forecast period, household employment increases by nearly 22,000 in the region, with three-quarters of the gains occurring in the two largest and highest-wage counties, Oakland and Macomb. On a percentage basis, the most rapid employment growth occurs in Livingston County.

“All of the counties in the region are forecast to see some decline in the unemployment rate over the next three years, although in each county the rate remains stubbornly high,” Fulton said.

The greatest declines in unemployment through 2013 occur in Genesee and Lapeer counties, while the lowest jobless rates over the period are found in Livingston, Oakland and Genesee.

“If the labor force does not rebound as we are anticipating, the declines in the unemployment rates would be even greater,” Grimes said.

The Economic Growth Alliance was formed in recognition of the six-county region’s influence as an economic unit of interrelated counties whose impact is greater than its individual parts, and where regional cooperation is integral to promoting the area’s economic development initiatives.

More at www.irlee.umich.edu/clmr or www.irlee.umich.edu.

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