The Michigan economy, with nine years of uninterrupted job growth from the third quarter of 2009 to the third quarter of 2018, sits on the brink of the longest period of job growth since the World War II era, University of Michigan economic forecasters say.
The current job-winning streak ties with the period ranging from the spring quarters of 1991 to 2000. And despite some slowing in job growth, the forecast for the next two years looks positive, say U-M economists Gabriel Ehrlich, George Fulton, Donald Grimes and Michael McWilliams and researcher Jacob Burton.
“That’s the good news,” said Ehrlich, director of U-M’s Research Seminar in Quantitative Economics. “The mixed news is that job growth is slowing down as the labor market tightens.”
Their annual analysis of the state’s economy also takes a deep look at where Michigan’s under 65 population growth will come from in the coming years — international migration and the attraction and retention of college-educated young adults.
Michigan saw a 29 percent rise in the number of college-educated 25- to 34-year-olds from 2010-17. And 13 of the 16 largest cities in the state surpassed the national average growth rate in attracting young adults with at least a bachelor’s degree.
International migration is forecast to make up 55 percent of Michigan’s population growth through 2025.
“International migration is an especially important driver of Michigan’s population growth because without it, the state’s population aged 64 or younger is projected to shrink by 200,000 residents by 2025,” Ehrlich said.
The overall 2019-20 forecast for Michigan sees steady but muted job growth, low unemployment, tame inflation and an economy that continues to diversify.
Other findings include:
• Jobs: The state will add 55,200 jobs in 2018, 35,800 in 2019 and 39,300 in 2020. That’s slower growth than the 1.9-percent rate the state had from 2011 to 2016.
In all, Michigan will have gained 683,200 jobs during the economic recovery from fall 2009 through the end of 2020, recouping nearly four out of five jobs lost since mid-2000.
• Automotive sector: U.S. light vehicle sales have slowed from recent years, and the Detroit Three’s share of sales has also nudged down to 41.6 percent from 42 percent a year ago. U-M economists forecast sales to decline from 17.1 million this year to 16.9 million units in both 2019 and 2020. The light truck share of the market should rise from 65 percent in 2017 to 75 percent by 2020.
“All three Detroit automakers have cut their profit forecasts for 2018,” Grimes said. “Ford has claimed that the steel and aluminum tariffs could cost it up to $1 billion.”
The forecast includes 6,000 additional manufacturing jobs this year with 3,300 in 2019 and 2,200 in 2020.
• Top growth sectors: Leading sectors for gains in 2018 have been construction and professional and business services, each adding 11,100 jobs in the first three quarters of the year. Health services grew by 7,400 jobs and manufacturing rose by 6,900 jobs.
The construction industry will add 8,300 jobs over the next two years. Professional and business services will add 13,500 jobs by 2020.
• Unemployment: Michigan’s sustained recovery will help the state’s unemployment rate creep down from an average 4.4 percent this year to 3.9 percent in 2019 and 3.8 percent in 2020.