Earth Orbit Technologies President and chief engineer Leon Brown talked about the benefits of working with Automation Alley and participating in Project Diamond during the Oakland County economic forecast in Novi on May 8, 2024.
(Peg McNichol/MediaNews Group)
Oakland County retains its standing as Michigan’s economic driver, thanks to a good credit rating, job stability, higher wages and other positive signs, according to a University of Michigan economic report.
That’s one finding from a three-year forecast by researchers at the University of Michigan presented to county, business and education officials Wednesday at the Suburban Collection Showplace Novi.
Others include an unemployment rate lower than the state average, job growth of 1% a year through 2026 led by healthcare and social services, and the highest economic output in Michigan and 14 other states.
“Unemployment is lower than before the pandemic. That’s not to be taken for granted,” said Gabe Ehrlich, a lead UM researcher and co-author of the forecast.
The annual 3-year forecast shows overall county employment has exceeded pre-pandemic levels by 1.3%. Among similar-sized U.S. counties, Oakland ranks ninth. Fairfax, Va., retains its No. 1 ranking, he said.
Employment in the county will grow by about 1% annually, he said, adding an estimated 8,000 jobs each year through 2026. Private health and social services sector will lead the way with an estimated 6,800 jobs. The automotive industry will add an estimated 1.4% jobs a year, he said.
Service industries still haven’t recovered from the pandemic. Ehrlich said this sector typically employs people with lower education and was hardest hit during the pandemic. The 0.8% annual growth he predicts in the service industry would still leave about 11,000 jobs unfilled.
Overall, he said, the county will see 23,850 jobs filled by 2026.
Unemployment will likely remain near 3%, Ehrlich said, remaining 1% below the state’s overall level. By the end of 2026, the county’s overall workforce will be 3.8% higher than before the COVID-19 pandemic.
The county’s estimated $127 billion gross domestic product in 2022 – the value of goods and services remaining after production costs – was the highest in Michigan and higher than 14 states.
“We are counting on continued growth in the county’s labor force to accommodate ongoing job growth,” Ehrlich said.
The forecast is not all good news. The UM economists said they expect modest growth in wages over the next three years. Blame inflation. They predicted by 2026 the average inflation-adjusted wage will be 4% higher than in 2019.
Ehrlich said the need to fill jobs and the lack of available workers in the U.S. and the state limits economic growth.
The report notes that by 2026, Michigan residents age 65 and older will account for more than 20% of the state’s population, acting as a speed bump for growth. Ehrlich said the pandemic caused retirees who had returned to the workforce to stay home, either because they are at greater risk of illness or because they have accumulated enough assets that they no longer need to work.
The overall report delivered moderately good news. County Executive Dave Coulter added a highlight. He said Moody’s has given the county a AAA-bond rating for the third time in five years, which means any county borrowing will cost the taxpayers less.
“It’s not the goal,” Coulter said. “Our goal is to make sure we’re providing services to our residents that improve their lives. (The bond rating) is the financial foundation that allows us to lean in on our goals as a county … Affordable housing, transit, sustainability and all the other things we like to talk about.”
Commissioner Mike Spisz, an Oxford Republican who leads the minority caucus, was pleased by the report, including the AAA-bond rating, which he said shows the county is finally past the economic effects of the pandemic and remains among the top 10 counties in the U.S.
Spisz said the forecast is “neither bright nor dim, as inflation and interest rates will continue to affect growth in the county, Michigan and the country.
“The only real surprise, and potential concern, was in the area of advanced manufacturing, where the average wages are well below the national average,” he said, adding the county commissioners need “to make informed business decisions and only pursue projects that have a true positive financial impact to the entire county.”
UM has produced the county’s three-year economic forecast for 39 years. This year’s co-authors included Jacob Burton, Donald Grimes and Michael McWilliams.
County officials used Wednesday’s event to promote Automation Alley and Project Diamond, created to help advanced manufacturing shift to digital production, which in turn supports higher wages. Automation Alley COO Pavan Muzumdar said companies can still apply for 3D printers through Project Diamond.
Coulter said Project Diamond is entering Phase 2, adding the 3D printers to 38 more companies in the county.
One company that received a 3D printer in Phase 1 is Pontiac-based Earth Orbit Technologies. The company distributes and services energy efficiency systems and is currently developing electric-vehicle charging systems, said Leon Brown, the company’s president and chief engineer.
The digital shift helped improve the supply chain by standardizing training, Brown said, adding that Earth Orbit’s skilled trades program trains employees between 18 and 26 years old. He expects to hire 11 new employees
He said Automation Alley’s database helps Earth Orbit estimate the cost of materials and find local and regional suppliers.
County Commission Chairman Dave Woodward said economic investments like Project Diamond create opportunities.
“This is what making things in America looks like,” he said. “We’re doubling down on making sure things are built in this economy (in a way) that will work for everybody.
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