University of Michigan forecast sees Oakland County's economy growing through 2026

Oakland County’s economy is expected to continue to grow overall during the next few years, according to a forecast released Wednesday by University of Michigan economists.

The annual forecast by the UM Research Seminar in Quantitative Economics concludes Oakland County is on par or in better shape than pre-pandemic levels regarding its labor force rate, jobless rate and gross domestic product.

The number of jobs in the county is expected to grow by 1% annually — about 8,000 jobs per year through 2026 — according to the forecast. By that time, the labor force rate is expected to be about 3.8% higher than before the pandemic. The jobless rate is expected to hold steady around 3% during that time.

"We are counting on continued growth in the county's labor force to accommodate ongoing job growth," Gabriel Ehrlich, leader of UM's economic forecasting team, said in a statement. Ehrlich co-authored the forecast with Jacob Burton, Donald Grimes and Michael McWilliams.

When it comes to payroll jobs in Oakland County, the county was about 1.8% shy of a full recovery in the third quarter of 2023, the forecast noted.

Areas expected to gain in employment are private health and social services. This sector is expected to add 6,800 during the next three years, according to economists.

Wage growth won’t be as strong as job growth, however, according to the study. Average wages in the county are forecasted to grow by 0.5% during the next three years, which economists view as modest growth considering local inflation that runs well above pre-pandemic norms. Overall wages in 2026 are expected to be 4%  higher than they were in 2019.

Oakland County continues to have the highest gross domestic product in Michigan, roughly $127 billion in 2022. That’s higher than 14 states. The county has the 30^th highest nominal GDP among all U.S. counties.

In an introduction to the forecast, Oakland County Executive David Coulter noted some highlights of the county's economic successes, including $387 million in business investment in 2023; 737 foreign-owned firms from 34 countries that have a business presence in the county, and $56.4 million in private and public investment in the county's downtowns.

"These achievements and more are why Oakland County powers Michigan’s economy with 20% of the state’s GDP and why we continue to be a destination for (original equipment manufacturers), (research and development), and small businesses, both nationally and globally," Coulter wrote. "To stay at the forefront and build an economy that works for everyone, we seek to be agile, innovative, and inclusive, with thoughtful programming and partnerships that serve our 39,000 businesses and 737,000 plus workers."

The county’s other areas of strength include: ranking in the top 10 in professional occupations, educational attainment and median family income. The county has a high share of employment in advanced manufacturing and related industries.

“It particularly excels at providing services support to advanced manufacturing, with a concentration more than double the U.S. average,” the economists said. “One concern, however, is that Oakland's average wage trails the national average for these industries.”

Ehrlich and his fellow economists caution that despite what they consider a "relatively rosy forecast," the county faces economic challenges due to Michigan's aging population. Residents age 65 and older are expected to make up more than 20% of the state’s population by the end of 2026. Growth could be hindered as more residents reach retirement age, the economists said.

cwilliams@detroitnews.com

@CWilliams_DN