UM Forecast Predicts Strong Job Growth For State
ANN ARBOR (WWJ) — There’s good news for jobseekers in the annual University of Michigan economic forecast for Michigan’s economy in the years ahead .
The UM forecast says the state will add some 130,000 jobs in 2014 and 105, after gaining about 80,000 jobs this year — and more than a quarter million in total since early 2010.
The job growth will return the state to job levels just prior to the 2008-09 Great Recession, according to UM economists Joan Crary and Donald Grimes.
“The story based on measures of the macroeconomy is largely encouraging and optimistic,” said George Fulton, director of UM’s Research Seminar on Quantitative Economics. “Michigan is closing out 2013 with a healthy year of growth, the second largest gain in jobs since 1999.”
He added that 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. The state is making inroads into replenishing the severe losses it suffered during the opening decade of the 2000s.”
The UM economists predict job gains of 65,000 in 2014 and anohter 65,800 in 2015, more than the average yearly job growth of 57,000 that prevailed from 1971 to 2000, prior to the downturn of the 2000s.
The job gains during the next two eyars will be evenly split among professional and business services and the trade, transportation and utilities sector, which includes retailing.
“The professional and business services sector has been a major contributor int he recovery to date,” Fulton said. “Nearly half of the increase in jobs in this sector since the end of 2012 has been in the highly compensated professional, scientific and technical services component, including engineering, accounting and architectural firms.:
Other major sectors projected to add jobs in 2014-15 are construction, 21,000 jobs; manufacturing, 17,000 jobs; and health care, 14,000 jobs.
“Construction has been plagued in recent years by the plunge in the home building market, but we are now seeing some meaningful revival unfolding,” Fulton said. “And health care has the longest string of yearly job gains, having added jobs every year since 1999.”
Manufacturing has led the current recovery since early 2010, but UM predicts its growth will slow over the next two years, reflecting both the maturity of the overall recovery and smaller increases in Detroit Three light vehicle sales.
Fulton and colleagues say Michigan’s jobless rate will fall from the current 9 percent to 7.9 percent at year end 2014 and 7 percent at the end of 2015. That’s better, but will still be about a percentage point ahead of the national rate, the economisdt ssaid.
More about the UM forecasts at http://www.umich.edu/~rsqe.