Economists offer upbeat forecast for Oakland County over the next three years

Pontiac — Oakland County's message about its future economy was upbeat as it revealed its 37th annual economic forecast Thursday against a backdrop of a pandemic rebound, falling jobless rates and global concerns such as the war in Ukraine.

University of Michigan economists said despite inflation, Oakland County is expected to surpass its pre-COVID-19 employment level during the third quarter of this year and see its unemployment rate drop below 3% by the end of 2024 – nearly a half percentage point below its average in 2019.

In the annual forecast unveiled Thursday at the M-1 Concourse Event Center on Woodward, Dr. Gabriel Ehrlich and Donald Grimes of the UM Research Seminar in Quantitative Economics predict the number of county jobs will grow by 4.3% this year, 2.9% in 2023 and 1.7% in 2024. All good news for a county that lost 148,000 jobs or 20% of its employment payroll in the second quarter of 2020.

“Oakland County’s recovery highlights its strengths as a region, including its educated workforce and focus on 21st-century manufacturing and engineering," said Ehrlich, director of the UM economics group.

Ehrlich said blue-collar industries are expected to be among the quickest to recover: By the end of 2024, economists expect that the job count within that sector will be 5.1% higher than the pre-pandemic level. Higher educational attainment jobs are expected to see a slight pickup — about 2.1% over the pre-pandemic level by the end of 2024 — but that sector also lost comparatively fewer jobs, researchers noted.

UM economists view a stronger recovery for the county than Michigan overall because of a relatively larger private sector that's grown more quickly than the government sector, a tighter labor market and strong uptake in federal pandemic relief efforts designed to help small businesses continue to pay their workers.

Oakland ranked first among Michigan counties on nearly every metric in the Paycheck Protection Program, including total funds, funds per resident, local jobs supported and total loan forgiveness. In all, more than 1 in 5 of Michigan's dollars from that program went to Oakland County businesses.

The economists forecast the county's average real wage to resume growth through 2024, finishing the period with an average wage of $71,700 in 2021 dollars, or about 7% above the pre-pandemic level.

In order for the region "to remain the research brain" of an increasingly computerized automotive industry, economists said wages will need to be more competitive.

Ehrlich and Grimes both acknowledged that there is some "risk" in the economic forecast, and believed inflation is "going to continue to remain hot" as reflected in the rising costs of groceries and at the gas pump for some time, but it will eventually drop.

"Consumers are pretty sour about the economy with some increases the highest we've seen in 40 years," Ehrlich said.

Other increases are a reflection of the availability of materials — such as in building trades — or even the availability of workers. 

County Executive David Coulter said the forecast underscores the importance of planning and decision-making at the county level to develop and implement programs and services for residents and businesses. He pointed to the county distributing more than $200 million in federal COVID relief funds to businesses, residents and nonprofit organizations.

Coulter said meeting future challenges involves helping residents get the education and training needed to meet demands. Toward this goal, the county has rolled out several innovative programs:

• Oakland80: Focuses on helping 80% of adults secure a college education or certified training by 2030. 

• Business Forward: Placed nine consultants in the community with a focus on minority, woman- or veteran-owned small businesses among the county’s 36,000 small businesses.

• Project Diamond: A grant program created in collaboration with Automation Alley to help small manufacturers gain access to advanced manufacturing tools.

Coulter said Thursday the county had provided more than 250 3D printers to small companies and helped provide training on the machines. Coulter said plans call for getting more technology tools out to businesses.

Coulter announced earlier this week that the county had been awarded a AAA bond credit rating by Moody's and S&P, which would help finance a $5.43 million groundwater storage facility in Oakland Township. 

“The ratings agencies reaffirmed our budgeting practices and how we’ve managed our economy through challenging times,” Coulter said. “We are in all ways, moving the county forward.”

Thursday’s event was hosted by Oakland County Department of Economic Development.

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