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Updated 11:00 AM May 8, 2006
 

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  Research
Oakland County on the right track for economic success

Despite only moderate job growth during the next three years, Oakland remains one of the nation's most prosperous counties and is on the right track for long-term economic growth, say U-M economists.

In their annual forecast of the Oakland County economy, George Fulton and Don Grimes of the Institute of Labor and Industrial Relations predict the county will add 14,000 jobs through 2008—4,300 this year, 5,300 in 2007 and 4,400 in 2008.

Although a far cry from the 21,600 new jobs Oakland County averaged annually from 1991-2000, the projected employment growth builds on last year's 1,900 job gains after four years in which the county lost nearly 53,000 total jobs.

"The short-run difficulties of the county economy must be put in context with its longer-term outlook," Fulton says. "Oakland remains one of the most prominent local economies in the nation with some of the most promising longer-term prospects. It is also among the most concentrated in knowledge-based economic activity, which is where we see the most promise for future prosperity."

Among more than two dozen comparably sized counties in the nation, Oakland ranked first in growth of per capita income (1991-2003); fifth in level of per capita income; and fourth in participation in knowledge industries in 2003—the last year for which data were available.

Nearly all of the 14,000 new jobs through 2008 will be in the private sector (500 will be in government), Fulton and Grimes say. All of these private job gains will be in the service-providing sector—professional/business services (9,900 new jobs); private education/health services (7,300); leisure/hospitality (2,400); trade/transportation/utilities (1,400); and information (400).

In all, the forecast predicts gains of 20,800 private service-providing jobs during the next three years. The goods-producing sector (manufacturing and construction), however, will lose 7,300 jobs during that time.

Most of the net job losses in manufacturing will be in the auto industry, the economists say. This weakness in auto manufacturing employment includes both estimates of job reductions through early retirement and buyouts at General Motors and Ford Motor Company, and the idling of the Ford Wixom plant in summer 2007.

"When the restructuring of the domestic auto industry eventually runs its course, the Oakland economy will grow more rapidly, labor force growth permitting," Grimes says. "Moreover, Oakland County's assets provide opportunities to continue diversifying its economy into areas with longer-term growth potential."

The county continues to effectively educate and train highly skilled workers—the key ingredient for a knowledge-based, export-oriented service economy, Fulton and Grimes say.

"Oakland has been the most successful locality in Michigan in making the transition from the traditional industrial economy to a knowledge-based economy, which offers the most promising avenue for future economic prosperity," Fulton says. "Oakland County is on the right road to sustain economic success. It is simply navigating some large potholes along the way."

The 21st annual U-M forecast of Oakland County's economy was sponsored by 19 Oakland County organizations.

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