In the forecast: 126,000 new jobs, unemployment falling to 4.5%
Michigan will add about 126,000 jobs in the next two years, according to the annual November forecast released Friday by economists at the University of Michigan.
If that forecast proves accurate, it will mean eight consecutive years of growth for the state economy.
Michigan will have gained more than 586,000 jobs during the economic recovery from the summer of 2009 through the end of 2017 — returning the job count to levels last seen in the spring of 2003.
The forecast was done by George Fulton, Joan Crary, Gabriel Ehrlich and Donald Grimes.
“From the perspective of how the economy has been performing overall in growing out of the prior severe recession, things are looking pretty good. The environment has stabilized and progress has been fairly impressive,” George Fulton, director of UM’s Research Seminar in Quantitative Economics, said in a news release.
“By several of the headline barometers of economic health such as growth in employment, growth in per-capita income and growth in per-capita GDP, as well as declines in the unemployment rate, the Michigan economy has been on a bit of a roll for the past five or six years,” he said. “And the state appears to be poised to continue the ride for a while longer, although perhaps not at the same pace.”
The UM economists predict employment gains of 61,100 jobs in 2016 and 64,800 jobs in 2017, down from projected job gains of 84,600 this year.
“Those are smaller job additions than what we’ve seen recently, but they still amount to solid gains, running at 1.5 percent per year over the two-year period compared with the slightly higher 1.6 percent per year we are forecasting for the nation,” said Gabriel Ehrlich, associate director of RSQE. “The continuing recovery in Michigan is consistent with sustained expansion of the U.S. economy, a recovering local housing sector and increasing Detroit 3 vehicle sales.”
About 32,000 job gains over the next two years will be in the professional and business services sector, which contains professional, scientific and technical services; management of companies; and administrative support services, including temporary help.
The trade, transportation and utilities sector, which includes wholesale and retail trade, transportation, warehousing and public utilities, will account for 22,000 job gains through 2017. About 60 percent will be in retail trade.
The construction industry will add 22,000 jobs over the next two years, and leisure and hospitality will see gains of about 20,000 jobs.
The growth in manufacturing jobs will decline, though. The gain is expected to be 10,000 jobs, down from an annual average of 20,000 the last four years.
The state’s unemployment rate is expected to fall from the current rate of 5 percent to 4.8 percent at the end of next year and 4.5 percent at the end of 2017.
On Thursday, UM economists gave their forecast for the U.S. economy. In their forecast: The nation’s economy will grow next year at its highest rate in a decade, and the national unemployment rate will fall below 5 percent for the first time since 2007.