Oakland County is in the midst of a strong rebound from the pandemic and associated recession, according to a forecast by two University of Michigan economists. Their report is part of the 37th annual forecast for the county and the first in-person report since the pandemic began.
Gabe Ehrlich directs the UM Research Seminar in Quantitative Economics. Donald Grimes is a specialist in regional economics.
Their economic forecast, like the weather, is subject to change depending on Ukraine’s immediate future, as well as the speed at which supply chain issues are resolved. The two shared highlights of the report ahead of an economic roundtable on Thursday at the M1 Concourse.
The cost of fuel and food are both affected by what Ehrlich called the “big wildcard” of Ukraine’s response to the Russian invasion.
Inflation, now at a 40-year high, will likely continue for at least the next quarter, Ehrlich said, but should ease by the end of this year.
Employment should continue to rebound, up 4.3% this year; 2.9% next year and 1.7% in 2024. Forecasts indicated that unemployment would fall below 3% by the end of 2024.
County officials said Moody’s Ratings Services and Standard & Poor’s assigned the county a AAA bond rating, its highest, for the $5.43 million in bonds to improve the township’s water supply. from Oakland.
Dave Coulter, Oakland County Executive, said each year this economic analysis is used to formulate programs, such as small business grants and to ensure businesses have the payroll protection money they need. they need during the worst of the pandemic. The county paid nearly $2 million for those efforts, he said.
The UM researchers analyzed three areas of employment: labor industries, which is one of the fastest recovering sectors; higher education and other vocational streams, which is recovering steadily; and hospitality and other service businesses, the hardest hit by the pandemic and the slowest to recover.
“The pandemic has changed…the patterns of the economy,” Ehrlich said, citing more people working from home. That translated into fewer business lunches, he said, and fewer people using services such as dry cleaning.
Over the next year, county partnerships with Oakland Community College and other institutions aim to help blue-collar and middle-wage workers earn two-year degrees or certificates through programs like than Oakland80.
Coulter said improving workers’ wages is another goal, to help “reduce some of the inflation.”
One of the challenges for businesses in the county is making salaries for people in math and computer science-related occupations more competitive, Ehrlich said.
Monetary policies will tighten as the pandemic continues to abate, Ehrlich said, with the Federal Reserve raising short-term interest rates. He predicted that this trend will continue.
One way to minimize future supply chain disruptions is to incentivize businesses to move, stay, or expand within the county. Coulter named three ways county officials are promoting these efforts, with small business navigators; Project Diamond, which provided 250 digital 3D printers, software and hardware, as an incentive to modernize small and medium enterprises; and promoting the retraining of workers for those looking for a new job or those who want new skills to progress in their current job.
County consumers, Ehrlich said, seemed “pretty sour” when asked general questions about the economy in the surveys, but when asked how they were doing individually, most said better than before the pandemic.
The Federal Reserve, he said, is better at managing inflation threats, using lessons learned from the Great Recession.
The county lost nearly 150,000 – 20% of salaried jobs – when the pandemic hit Michigan in 2020. But by the third quarter of 2021, more than two-thirds of those jobs had been recovered.