UM predicts continued growth for Michigan economy

Michigan’s current streak of economic growth is expected to continue over the next two years, but at a significantly slower pace in the labor market, University of Michigan economists said Friday in an annual forecast.

Economists predict job gains of 61,100 in 2016 and 64,800 jobs in 2017, helped by a rebound in the housing market and sustained gains in sales at automaker Detroit 3. Still, the new projected annual numbers are lower than the gains in 84,600 jobs expected this year.

The state‘s sustained recovery will help reduce the state’s unemployment rate from 5% currently to 4.8% by the end of next year and 4.5% by the end of 2017, they said. declared.

To arrive at their forecast, the economists looked at barometers of economic health: job growth, income growth per capita and growth in gross domestic product per capita, as well as a decline in the unemployment rate.

The result? Michigan’s economy “has been on a bit of a roll for the past five or six years,” George Fulton, director of UM’s Research Seminar in Quantitative Economics, said in a statement. “And the state looks set to keep the race going for a little longer, but maybe not at the same pace.”

In their annual forecast for Michigan’s economy, Fulton and colleagues Joan Crary, Gabriel Ehrlich and Donald Grimes said they expect Michigan to gain more than 586,000 jobs during the economic recovery from the US. summer 2009 to the end of 2017.

Those totals would bring employment levels back to those last seen in the spring of 2003. It will also have recovered more than two-thirds of the jobs lost since mid-2000, a decade that policymakers have described as lost due to of its poor economic performance.

“Things are looking pretty good. The environment has stabilized and the progress has been pretty impressive,” Fulton said. He gave an hour-long presentation on his forecast at an economics conference on the Ann Arbor campus on Friday.

Economists who worked on the forecast said the smaller job gains projected over the next two years still represent solid gains that match the national forecast.

In a separate forecast on Thursday, economists at the University of Michigan this morning presented their most optimistic outlook for the US economy in some time, including an extremely bullish forecast for vehicle sales at engine.

Sales of cars and light trucks, which averaged about 17.4 million this year, are expected to reach 18 million next year and 18.1 million the following year, according to UM economists. If achieved, these sales levels would mark one of the most sustained periods of strength in auto industry history.

Other economists see a generally robust local economy for southeast Michigan as a result. “Real estate development in Southeast Michigan remained strong during the third quarter,” Robert Dye, chief economist at Comerica Bank, wrote in a report this week. “Both single-family and multi-family housing starts rose sharply from the previous year.”

Arguably, economic conditions in western Michigan are even stronger in some areas. A study by All Property Management recently found Grand Rapids to be one of the best rental markets in the country, according to Dye.

In forecasts from the University of Michigan released on Friday, growth varies by sector. The sector, including commerce, transport and public services, will represent 22,000 jobs created until 2017.

The construction industry will add 22,000 jobs over the next two years. Leisure and hospitality jobs will increase by about 20,000, while manufacturing is expected to increase by about 10,000 jobs during this period. That’s down from an annual average of around 20,000 job creations in the previous four years, when auto factories came back to life.

“The deceleration in manufacturing job growth reflects more mature stages of the overall recovery and slower vehicle production growth going forward,” Grimes said in a statement.

While the forecast is cause for optimism, UM economists warn that Michigan ranks “closer to the caboose than the engine” in important economic measures, including per capita income and health levels. ‘instruction.

“When the outlook is the absolute level of certain key economic indicators, rather than the change in their values, the story is not as optimistic,” Fulton said during his presentation on Friday. “What that tells us is that although we’ve made quite a bit of progress recently, we still have a ways to go.”

Contact Matthew Dolan: 313-223-4743 or [email protected] Follow him on Twitter @matthewsdolan