Forecast: Oakland Co. economy growth 'slow but steady'
Troy — More than 600 people who packed the Troy Marriott banquet hall Friday for the 34th Annual Oakland County Economic Outlook luncheon have heard it all before, but as county Executive L. Brooks Patterson proudly boasts, it bears repeating.
“I’ve said it before but Oakland County is the economic engine of the state,” said Patterson, greeted with a standing ovation. “… Oakland is responsible for one quarter of Michigan’s economic output, the largest in the state followed by Wayne County.”
University of Michigan economists Dr. Gabriel Ehrlich and Donald R. Grimes laid out their findings for the next two years, which support Patterson’s view that “we don’t compare ourselves to other counties, our benchmark is other states.”
Both economists forecast “slow but steady” economic growth over the next three years.
Ehrlich and Grimes are in the business of economic forecasting. Grimes is director of the university’s Research Seminar in Quantitative Economics, published national, and testifies twice each year to the state legislature on Michigan’s fiscal and economic prospects.
Grimes is senior research area specialist in the research seminar and at the Economic Growth Institute, where he is assistant director of the Center for Labor Market Research. Grimes has worked at economic forecasting for state and local governments for 40 years and in research projects for the U.S. departments of Commerce and Labor.
Amidst a dizzying parade of statistical charts and graphs in their bullet-point presentation, the economists pointed out that Oakland County:
--Added 9,300 jobs in 2018, a growth rate of 1.3 percent.
--Is forecast to have job growth average 1.4 percent for the next three years, for an increase of 31,600 jobs from 2019 to 2021.
--Gained jobs in professional business services. private education and health services, and trade, transportation and utilities.
--Had an annual average wage in 2017 of $61,536, compared with the average U.S. wage of $55,390.
--Recorded average unemployment average 3.3 percent in 2018, lower than the U.S. average of 3.9 percent in 2018.
--Ranked between 5th and 14th in several measures when compared to 37 other counties with populations between 900,000 and 1.6 million residents.
“We believe Oakland County’s strong overall performance in these measures suggest it is securely positioned now and for the future,” the Economic Outlook reports notes. “The combination of an educated populace, a high share of managerial and professional jobs, and an attractive standard of living should provide a solid foundation of economic prosperity over our forecast period and in the years to come.”
In 2017 companies located in Oakland County paid employees total wages of about $45 billion, greater than total wages earned in 16 states. More than 728,000 people were employed in Oakland County, more than in 13 states, and the county's exports in 2017 exceeded $14.4 billion, surpassing those of 25 states.
Gross Domestic Product statistics for 2012-15 for the state show Oakland County’s GDP was $101 billion in 2015, the largest of all Michigan counties and about 25 percent larger than the next largest, Wayne County. Oakland County accounted for 23 percent of Michigan’s real GDP in 2015.
The economists said Oakland County’s economic future is deeply intertwined with the overall health of the national economy and its GDP is expected to decelerate over the next few years.
“Although we are projecting growth to slow down over the next few years, our baseline outlook does not include a national recession over the forecast horizon,” the economists report. “We believe the Fed will be able to engineer a ‘soft landing’ with growth slowing but not venturing into negative territory.”
Oakland County, which prides itself on having a balanced, rolling fiscal budget through 2023 and a Wall Street AAA bond rating since 1998, is in a good place, the economists believe.
“The acceleration in Oakland County’s job growth is a heartening sign this far into the country’s recovery period,” Ehrlich said. “It is especially impressive given the recent softness in Detroit Three light vehicle sales, which have declined in each of the past three years.”
Grimes said: We are forecasting that job growth will be similar in all industry wage categories over the next three years. One fact we see boosting growth in the middle-wage industries is the government sector’s return to growth in Oakland County.”