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Friday, October 18, 2019

Economic outlook for Washtenaw County: Three more years of growth

  • Kelly Gampel U-M economists Donald Grimes, center, and Gabriel Ehrlich answer questions from the audience after presenting the county economic outlook data March 28 at the Washtenaw Economic Club luncheon.

University of Michigan economists anticipate three more years of job growth, falling unemployment and real wage growth for Washtenaw County.

“Our baseline forecast is that Washtenaw County will enjoy at least three more years of positive economic news, extending its current growth streak to 12 calendar years,” the authors of The Economic Outlook for Washtenaw County in 2019-21 write in the conclusion of the 34th annual report.

That news was delivered by U-M economists Donald Grimes and Gabriel Ehrlich to a gathering of nearly 200 people at a Washtenaw Economic Club luncheon on Thursday, March 28. The report is sponsored by Washtenaw Community College and Ann Arbor SPARK.

Grimes is a Regional Economic Specialist and the University of Michigan; Ehrlich the Director of the university's Research Seminar in Quantitative Economics.

Alex West, Director of Research at Ann Arbor SPARK joined the economists on stage for a Q&A session at the end of the luncheon presentation.

The full report can be downloaded from the Washtenaw Economic Club’s website.

The report notes that Washtenaw County’s economy is “well into its tenth year of expansion since the previous recession’s low point in the summer of 2009.”

From 2009 to 2018, Washtenaw County:

  • Added 31,391 jobs
  • Experienced a 1.8 growth rate per year
  • Outpaced average growth rate of the United States (1.4 percent) and Michigan (1.5 percent)

That consistent growth is beginning to slow down, however. The county’s job growth was 1.1 percent in 2018, when data through the second quarter suggests an additional 2,346 jobs were created. That increase is the second smallest annual job gain since the end of the recession. Last year’s economic forecast called for 3,721 jobs to be created in 2018.

The report does anticipate continued job growth through 2021 “at around the pace seen in 2018.” Anticipated job growth over the next three years:

  • 2,090 in 2019
  • 2,628 in 2020
  • 2,626 in 2021

“It’s not gangbusters employment growth, which we were getting when we were coming out the recession; but that’s very respectable growth at this stage of the business cycle,” Grimes said. “It’s about as good as you can get given how tight the labor market is in the county.”

The growth, the report notes, would bring the span of expansion to 12 years – which would be the longest sustained employment expansion in the county’s history since at least 1969, when that data was first collected at the county level.

The report also calls for continued drops in Washtenaw County’s unemployment rates, to 2.8 percent in 2019, 2.6 percent in 2020 and 2.5 percent in 2021.

The county’s unemployment rate fell to 3.2 percent in 2018 after holding roughly flat in the 3.6 to 3.7 percent range the previous three years, the report states. The county’s all-time low was 1.6 percent in 1999.

Other notes from the The Economic Outlook for Washtenaw County in 2019-21 report:

  • Washtenaw County’s payroll job count reached a new all-time high of 212,600 jobs in 2018.
  • More than one-third of job gains in Washtenaw County over the next three years are expected to occur in the government sector, which includes education (U-M, EMU, WCC and K-12 school districts).
  • Washtenaw County’s average real wages have increased by an average of just 0.4 percent per year since 2009. “Real wage growth has been the missing piece of the labor market recovery nationally, and Washtenaw is no exception,” the report states.
  • Real wage growth for blue-collar workers in Washtenaw County have fallen by an average of 1.5 percent per year since 2009.
  • The average real wage in Washtenaw County reached $57,845 in 2018. The report estimates it will increase by 1.6 percent to $58,758 in 2019 before “accelerating consumer price inflation will constrain” growth to 0.4 percent in 2020 and 2021, so that average real wage will reach $59,264 in 2021.

Download a full copy of The Economic Outlook for Washtenaw County in 2019-21 report from the Washtenaw Economic Club website.

View photos from the event on our Flickr page.

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Susan Ferraro
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734-677-5295
snferraro@wccnet.edu

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