THE ECONOMIC OUTLOOK FOR WASHTENAW COUNTY IN …media.mlive.com/ann-arbor-business_impact/other/A2... · THE ECONOMIC OUTLOOK FOR. WASHTENAW COUNTY . IN 2016–18. Prepared by . George

THE ECONOMIC OUTLOOK FOR WASHTENAW COUNTY

IN 2016–18

Prepared by George A. Fulton Donald R. Grimes

Institute for Research on Labor, Employment, and the Economy

Prepared for

March 2016

This report was prepared in connection with the March 22, 2016, Ann Arbor News edition featuring the outlook for the Washtenaw County economy. The full report is available on the Web (updated each year) at www.irlee.umich.edu/clmr and also at www.mlive.com/ann-arbor.

The Economic Outlook for Washtenaw County in 2016–18

By GEORGE A. FULTON, research professor, and DONALD R. GRIMES, senior research area specialist, Institute for Research on Labor, Employment, and the Economy, University of Michigan

Introduction

As good as it’s been for the economy in Washtenaw County, it continues to get better in

the ongoing recovery from the Great Recession. Job gains have been robust, and the

unemployment rate has fallen dramatically since the economy hit bottom in the summer of 2009.

But that success has been accompanied by lingering trepidation among some of the county’s

residents, who remember only too well the difficult times that prevailed not long ago. The

economy slowed considerably in 2014, raising fears that the weakness was foreshadowing an

imminent downturn after five years of recovery. (A reminder is due here that there is no time

limit on the duration of economic recoveries.) The slowdown turned out to be more of a hiccup;

and as we had projected in last year’s report, the economy bounced back strongly in 2015.

Some muting of the enthusiasm over the mushrooming economy is warranted, however,

particularly among those who are still not fully participating in the economic recovery. In

addition, for those with jobs, wage growth has been largely anemic as employment expands.

This certainly provides fuel for political candidates who play on this discontent by claiming the

domestic economy is a mess.

The Washtenaw County economy is hardly a mess. Washtenaw has gained over 21,000

jobs from calendar year 2009 to 2015, and the unemployment rate has fallen 5 percentage points,

from 8.6 percent to 3.6 percent over the same time frame. Job growth in the county has been at

its most rapid pace for any six-year period since the 1980s, and Washtenaw has outperformed

both Michigan and the nation over that time. By early 2013, the county had recovered the

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number of the jobs it lost in the previous downturn, but even so, the state is still well short of full

recovery.

What will it take for this very promising economy to become a truly great economy, and

will we see that happen over our three-year forecast horizon? To qualify for the status of great,

the county’s job growth would have to be sustained, certainly, but that is not enough. We also

need to see improvements in the areas of concern, those being underutilized labor and wage

stagnation, all taking place in an environment of moderate inflation. Will the county get there, or

will the recovery run its course by 2018? Our view of where the Washtenaw County economy is

now and where it’s headed over the next three years is, of course, the central focus of this report,

which offers our view on the path of employment, unemployment, wages, and inflation through

2018.

The local forecast is generated from a regional model constructed specifically for this

study at the University of Michigan’s Institute for Research on Labor, Employment, and the

Economy. The regional model uses as inputs national economic indicators from the University’s

Research Seminar in Quantitative Economics in the Department of Economics.

Before considering our perspective on how the Washtenaw County economy will evolve

through 2018, we first take a look at 2015, to learn more about what kind of year it was and to

gauge how well we anticipated developments as that year began.

Review of the Forecast for 2015: A Report Card

A year ago (March 19, 2015), we presented our thirtieth annual economic outlook for

Washtenaw County (coterminous with the Ann Arbor metropolitan area). Last year’s forecast of

employment, unemployment, and inflation for 2015 can now be compared with estimates of the

outcome for that year, to see how accurate our forecast was.

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In our forecast last March, we considered the weak job growth in 2014 (the smallest

annual increase in jobs during the current recovery) to be simply a pause in an otherwise

continuing path of healthy job growth. By our current estimate, the outcome for 2015 supports

that prognostication, as job growth accelerated from 0.7 percent in 2014 to 1.9 percent in 2015.

Our forecast last year of job growth for 2015 was a tad high at 2.1 percent, but only by 0.2

percentage points, as recorded in table 1. Our average error over the past thirty years is 0.6

percent, or six workers per 1,000.

In fact, the forecast errors for employment across all of the major industry divisions were

modest, save for one category. The overshoot in job growth was concentrated in one sector,

government, mostly in the state government component, which in Washtenaw is dominated by

the University of Michigan and Eastern Michigan University. This too-optimistic forecast for

the institutions of higher education deviates from a pattern established in recent years of our

being too pessimistic about employment gains in this sector. The errors among the other major

sectors were quite small and typically on the low side. The largest discrepancy in industry job

performance between what we anticipated a year ago and what transpired for 2015 was a

moderate underprediction of 265 jobs, occurring in the large trade, transportation, and utilities

sector. The forecast record overall grades out as an A, especially in view of how difficult it is to

forecast at this level of detail for a small, open economy such as Washtenaw.

The observed and forecast numbers for the unemployment rate and the local consumer

price inflation rate in 2015 are reported at the bottom of table 1. Last year we forecast a decline

of a little less than one percentage point in the unemployment rate, from 4.8 percent in 2014 to

3.9 percent in 2015. We were not too far off, with the now posted unemployment rate falling a

little more than one percentage point, to 3.6 percent, in 2015.

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Table 1 Report Card:

Track Record over the Years

Year of forecast Percentage forecast error

for total jobs 1986 – 1.4 1987 – 0.8 1988 – 1.2 1989 – 0.6 1990 +0.8 1991 +1.4 1992 +0.5 1993 +1.3 1994 n.a. 1995 +0.2 1996 +0.3 1997 +0.4 1998 – 0.5 1999 0 2000 0 2001 +0.3 2002 +0.3 2003 +1.0 2004 +0.2 2005 +0.4 (estimate) 2006 +0.7 2007 0 2008 +0.6 2009 +1.0 2010 –2.3 2011 – 0.6 2012 – 0.4 2013 0 2014 +1.1

2015 +0.2

(Positive numbers indicate that the forecast was too high; negative, too low.)

Average absolute forecast error 1986-2015: 0.6%

Forecast

2015 Actual 2015

Unemployment rate 3.9% 3.6% Consumer inflation rate -0.1% -1.4%

Forecast date: March 2015

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After hitting the bull’s eye for two years in a row in forecasting local inflation, we made a

fairly large miss for 2015. We did anticipate that local inflation would be very weak in 2015: we

projected a decrease of 0.1 percent, due largely to declining energy prices. According to recently

released government data, local prices did decline last year, but at a more substantial rate of 1.4

percent. The large decline in prices is quite pervasive, and quite puzzling. The U.S. CPI

increased by 0.1 percent in 2015, and the decline of 0.1 percent we forecast for the local CPI is

more in line with the typical relationship between the two measures.

This review gives us a glimpse of an economy picking up the pace again last year after a

slowdown in the prior year, with job growth in 2015 matching the average annual rate of 1.9

percent recorded over the current six-year recovery period. We need to take a more detailed look

at the current state of the economy, however, before we anticipate developments beyond 2015.

The Current State of Washtenaw County’s Economy

Employment Path of the Washtenaw County Economy

What we have learned from the report card for 2015 is that the Washtenaw County

economy continued to expand in 2015, returning to cruising altitude after a hiccup in 2014. As

shown in figure 1, Washtenaw recorded its sixth calendar year of economic recovery in 2015, as

measured by net annual job growth. The county suffered job losses at an accelerating pace from

2006 to 2009, bottoming out in 2009 with a loss then of 5,712 jobs. This low point was a

culmination of the national Great Recession, bankruptcy proceedings for both General Motors

and Chrysler, and the repercussions locally of Pfizer’s departure.

By 2010, Washtenaw turned the corner to return to positive growth, creating 17,490 jobs in

the five years from 2010 to 2014, a vigorous pace of 1.9 percent per year. The gains in 2014

softened to 1,426 job additions with the retrenchment of certain industries, led by the auto

industry. Last year we anticipated that this was simply a pause in the recent pace of job growth

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due to special circumstances, and not a foreshadowing of a general slowdown in the economy

into 2015.

Our assessment of a year ago was validated by the data on 2015 released since then. By our

estimate, job growth in 2015 has rebounded to grow at 1.9 percent, matching the average annual

growth rate of the prior five years of the recovery. The gains over the six-year recovery period

from 2009 to 2015, amounting to 3,537 jobs per year, exceed the average yearly additions of

2,720 jobs in the prior growth era from 1991 to 2002.

The top job producers in 2015 among the major industry divisions were: professional and

business services; trade, transportation, and utilities; state government (public higher education

and the U-M Health System); and private education and health services. That certain major

industry divisions have grown more rapidly than others this far into the recovery raises the

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question of which underlying industries are leading the resurgence of Washtenaw’s economy.

Next, we’ll probe a little more deeply into that angle of Washtenaw’s economic development.

Twenty Private-Sector Industries with the Greatest Job Gains in Washtenaw County, 2010–15

It is instructive to break out, at the most detailed industry level available, the top job

producers in Washtenaw’s recovery to date. The twenty industries with the largest employment

gains in the county from calendar year 2010 to 2015 are shown in table 2, with the percentage

job growth and the average annual wage in 2014 for each industry also included for reference.

Table 2 Private-Sector Industries with the Greatest Job Gains in Washtenaw County

2010-15

Change 2010-15

% Change 2010-15

Average Annual Wage 2014

Private sector 11,266 9.7 $51,056 Computer systems design and related services 1,058 61.6 85,897 Nondepository credit intermediation and related activities 1,029 377.2 65,673 Full-service restaurants 882 17.2 17,096 Offices of physicians 868 27.3 101,972 Limited-service restaurants 737 19.3 13,451 Nursing and residential care facilities 688 17.8 27,676 Data processing, hosting, and related services 617 188.9 85,576 Education except primary and secondary schools 594 40.7 34,258 Caterers, mobile food services, and food service contractors 554 137.2 19,954 Testing laboratories 524 30.1 112,251 Facilities and other support services, travel and security services 432 104.5 37,172 Warehouse clubs, supercenters, and other general merchandise stores except department stores 431 34.6 23,399 Home health care services 395 23.8 28,079 Marketing, veterinary, and other professional and technical services 378 39.4 50,506 Wholesale trade, durable goods 349 16.7 76,136 Physical, engineering, and biological research 311 11.8 98,886 Computer and electronic product manufacturing 302 35.6 76,097 Beverage, textile, apparel, wood, paper, petroleum, nonmetal products, primary metals, electrical equipment, and furniture manufacturing 299 68.8 56,305 Fitness and recreational sports centers 291 44.5 17,443 Plastics and rubber products manufacturing 283 28.9 97,406

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Among the twenty industries, ten of them have wage levels above the average for the

county overall, most of them well above. In addition, three of the top five industries with the

largest job gains over the period pay well above average wages.

Half of the top twenty job providers are in three general areas of activity: (1) computer-

related and R&D; (2) health-care-related; and (3) restaurants and caterers. The first category is

higher-wage; the second category is a mixture of compensation levels; and the third is lower-

wage. That the job profile for Washtenaw is dominated by technology, health care, and

hospitality is entirely consistent with its traditional strength and its image. One industry on the

list that has been on the rise in recent years is testing laboratories, largely related to the white-

collar auto industry.

Next up is a consideration of the unemployed in the current recovery.

Unemployment Path of the Washtenaw County Economy

The performance of Washtenaw’s economy can also be evaluated with unemployment as

the measure. The path of the county’s yearly unemployment rate from 2010 to 2015 is shown in

figure 2. (Note that the rate is for the county, and should not be confused with the rate for the

city of Ann Arbor.) The rate for the United States is included for comparison.

The unemployment rate for Washtenaw County has shrunk dramatically with the

recovery in the local labor market, cut by more than half from a rate of 8.1 percent in 2010 to 3.6

percent in 2015. The decline in the rate observed in 2011 was due in part to discouraged workers

leaving the labor force, which officially removes them from the count of the unemployed. By

2012, movements in the local labor force turned positive as a greater number of residents sought

out expanding job opportunities.

These county unemployment numbers can be put into context in two ways. First, if we

compare the outcomes over time for the county, we find that the rate of 3.6 percent for 2015 has

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returned to the annual reading last registered in 2002, and matches the rate of 3.6 percent

averaged between 1990 and 2007.

Second, if we compare rates geographically, we find that Washtenaw does compare

favorably with the United States, as shown in figure 2. The gap between the two rates has

ranged from 1.4 percentage points to 2.1 percentage points in Washtenaw’s favor from 2010 to

2015, with Washtenaw’s rate in 2015 of 3.6 percent falling 1.7 percentage points below the U.S.

rate of 5.3 percent.

Even though the county’s unemployment rate is dropping, a number of Washtenaw’s

residents who want to work are still not working, or are working part-time and would prefer to

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work full-time. Fortunately, there are progressively fewer of them as the county economy

continues to improve.

Washtenaw operates within a broader economic environment that has ramifications for

our outlook for the county. As we extend our analysis into the future, we start with a summary

of the national outlook.

National Outlook: 2016–18

The future course of the Washtenaw County economy depends in part on the overall

health of the national economy. Forecasts of economic indicators for the U.S. economy in 2016–

17 are from a forecast prepared in March 2016 by Gabriel M. Ehrlich, Matthew G. Hall, Daniil

Manaenkov, Ben S. Meiselman, and Aditi Thapar of the Research Seminar in Quantitative

Economics (RSQE) at the University of Michigan; they also provided internally generated

extensions of the forecast to 2018. The national outlook is summarized in figures 3, 4, and 5 by

two economic indicators key to the Washtenaw economy.

The best single measure of the U.S. economy is inflation-adjusted, or real, Gross

Domestic Product (GDP): all of the goods, services, and structures produced in the economy. As

shown in figure 3, real GDP growth averaged 2.4 percent in 2015, the same as in 2014. In 2015,

final sales to domestic purchasers—a broad measure of domestic final demand—grew by 2.8

percent, the fastest pace during this recovery by far. Annual real GDP growth, however, was

only the third-strongest since 2009, reflecting a drag from the rest of the world due to slowing

global growth and a sharply higher value of the dollar. The drag from net exports continues into

the earlier parts of 2016, holding down the annual growth rate to 2.3 percent. The headwinds

from net exports are expected to moderate, although remaining sizable, during the rest of 2016

and 2017. Coupled with the projected growth of final domestic demand similar to 2015, this

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pattern implies a slight acceleration in GDP over the rest of 2016 and 2017. Real GDP growth

then tapers off a bit in 2018, to 2.5 percent.

Underlying the projection for domestic final demand growth are solid consumption growth,

steady support from residential construction investment, a quick turnaround in business fixed

investment, and at last a positive contribution from the federal government sector.

Another important input to the outlook for Washtenaw is the national vehicle sales forecast.

From a longer-term perspective, sales of U.S. light vehicles—cars, minivans, sport utility

vehicles, crossovers, and pickup trucks—were in the range of 16 to 17+ million units sold

annually from 1999 to 2007, as shown in figure 4. Sales then retreated to 10.4 million units by

2009, and have increased every year since then. The industry crossed the 16-million-unit line in

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2014, and then cleared the 17-million-unit line in 2015 at 17.3 million units, finishing

approximately on par with the year 2000, until now the all-time best year for sales, and another

period of cheap gas and rising truck popularity. In our forecast, we move upward from there.

Pent-up demand continues to be a significant factor in the climb, as the average age of vehicles

on the road today is still at record high levels, gasoline prices and interest rates remain low, and

the labor market continues to improve.

A shorter-term perspective on vehicle sales can be seen in figure 5, which also shows the

prospects for the Detroit Three share of the light vehicle market. Total unit sales grow from 17.3

million units in 2015 to 17.8 million in 2016. Sales increase more slowly in 2017, to 18 million

units, and hold at roughly that pace in 2018. The sales projection for 2017 would set a new all-

time record for a calendar year.

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The Detroit Three’s share of the light vehicle market fell from 44.3 percent in 2014 to

43.6 percent in 2015. That decline was due to very rapid growth in non-Detroit Three sales,

rather than a decline in Detroit Three sales. We see the Detroit Three share drifting up from

there to 44.2 percent in 2016 and 44.5 percent in 2017, where it holds for 2018. This pattern is

consistent with our projection of a slight decline in the share of foreign-made vehicles, as a rising

share of auto imports is offset by a declining light truck share.

The projections for total sales and the Detroit Three’s share of that market, taken

together, yield our outlook for Detroit Three sales, which move up from 7.5 million units in 2015

to 8 million in 2017 and 2018. From 2016 to 2018, Detroit Three sales flatten out after growing

consistently over the recovery period.

We now turn to our view of the prospects for the county economy through 2018.

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Washtenaw County Outlook: 2016–18

The economic outlook for Washtenaw County through 2018 is measured using

information on employment, unemployment, inflation, and the real wage. First, we evaluate the

county’s prospects for job growth in total, putting that in context with recent job market

developments.

Employment

The Washtenaw County economy is now well into its seventh year of recovery since the

previous recession’s low point in the summer of 2009. To date, the recovery has been brisk,

adding 21,222 jobs from calendar year 2009 to 2015, a growth rate of 1.9 percent per year. Over

that same period, the county’s job growth outpaced both the nation’s 1.3 percent per year and

Michigan’s 1.5 percent per year.

The county economy added another 3,732 jobs in 2015, an increase of 1.9 percent that

matched the pace of job growth over the current recovery period, returning job creation to its

cruising altitude after a weak 2014. We see the local economic fundamentals in place, in

combination with a continuing expansion of the U.S. economy, to support the extension of a

solid recovery in the county through 2018, lengthening its span to nine years with job growth

averaging a touch slower 1.7 percent per year over the next three years. As shown in figure 6,

we are forecasting that the county will add a total of 10,594 jobs over the next three calendar

years, picking up a little each year: 3,041 in 2016, 3,713 in 2017, and 3,840 in 2018.

The job additions in each of the next three years will exceed the 2,720 jobs per year

gained on average during the prior growth period between 1991 and 2002. Indeed, there is no

nine-year period since 1990 that can rival the 31,816 jobs created from 2009 to 2018, if our

forecast proves correct.

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To put the current recovery, including the forecast period, in broader historical context,

we now consider how much ground the Washtenaw economy is making up from 2009 through

2018 relative to what it lost in the preceding decline. Here we assess Washtenaw’s progress

measured from its previous economic peak in the summer of 2002—a more challenging

benchmark.

The quarterly path of total jobs from the start of 2000 to the end of 2018, adjusted for

seasonal variations, is shown in figure 7, which summarizes in a single picture Washtenaw’s

recent economic history and our view of its near-term future. For comparison purposes, we

include the same profile for Michigan, with both the county and state employment paths indexed

to equal 100 in the second quarter of 2000, which represents Michigan’s previous peak

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employment level. Using index values permits us to compare on the same figure two regions

with widely different employment scales.1

From its peak employment quarter in the summer of 2002 (index value of 100.4) to its

trough in the summer of 2009 (92.1), the county lost 16,122 jobs, 62 percent of them occurring

in the two-year period spanning the summer quarters of 2007 to 2009. Then the recovery

follows: from the low point in the third quarter of 2009 to the first quarter of 2013 (100.6),

Washtenaw gained 16,555 jobs—thus replenishing the number of jobs lost between the summers

of 2002 and 2009. From then to the end of 2018 (109.3), we are forecasting that the county will

1To clarify: an index value of 90 indicates that employment in a given period is 90 percent of its level in the base period (in this case, the second quarter of 2000), that is, it’s 10 percent less than the base period value. An index value of 110 indicates a level of employment that is 10 percent higher than its level in the base period.

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create an additional 17,041 jobs, thus cumulating to 33,596 job additions from the quarterly

bottom of the downturn through the fourth quarter of 2018 (16,555 + 17,041).

In contrast, the state as a whole is forecast to fall well short of the employment level

enjoyed at its peak in the spring of 2000 (100) by the end of 2018. The employment decline in

the state was much more precipitous from the spring of 2000 to the summer of 2009 (an index

value of 81.7 compared with Washtenaw’s 92.1). Washtenaw’s recovery has also been more

vigorous from the summer of 2009 to date, and the gap is expected to continue to widen over the

forecast period through 2018 (109.3 for the county compared with 95.0 for the state in the fourth

quarter of 2018). By the end of 2018, we are forecasting that the state will replenish 73 percent,

or about three in four, of the number of jobs lost from the spring of 2000 to the summer of 2009.

That would return the state to the job levels it posted at the beginning of 2003, leaving it with

still more ground to be made up.

Real Wage

The average real wage (2014 dollars) in Washtenaw County between 1990 and 2018 is

shown in figure 8.2 The average is also shown for three industry group combinations: (1) blue-

collar industries such as natural resources and mining, construction, manufacturing, and

transportation; (2) service-providing industries that tend to employ workers with relatively high

levels of education, including government, education and health services, professional services

and corporate headquarters, wholesale trade, financial activities, and information services; and

(3) service-providing industries that employ workers with less education such as retail trade,

leisure and hospitality services, business support services such as temporary help services, and

the miscellaneous other services category, which includes repair and personal services.

2The wage series are averages per worker, and do not include variations in hours worked, a measure that is not available to us in the detail we would require. This is likely less of a consideration over the longer term.

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The average real wage in the county for all workers has slowly risen over time from

$46,462 (2014$) in 1990 to an estimated $53,206 in 2014. We estimate that the average wage in

the county rose to $55,669 (2014$) in 2015 as a 1.4 percent decline in prices converted a 3.2

percent nominal wage gain into a rather impressive 4.6 percent increase in the real wage. We are

forecasting that the average wage will continue to increase, at a more modest pace, to $59,131 in

2018. Note in figure 8, however, that the wage gains have not been evenly distributed either

across time or by major industry group.

In 1990, the blue-collar industries had the highest average real wage ($63,903), about

one-third more than workers in the higher-educational-attainment service industries earned

($47,650), and more than double the average wage in the lower-educational-attainment service

industries ($24,301). The average wage in the blue-collar industries continued to increase

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through 2007, reaching a peak of $76,780 (in 2014$). The average blue-collar wage then fell

sharply through 2013, reaching a low of $61,816, about 3 percent below 1990 levels. Since

2013, the average blue-collar wage has increased, and is forecast to exceed 1990 levels in 2016.

A note of explanation might be helpful here. The average wage in any industry group

reflects both the wages in a detailed industry and the share of the group accounted for by the

detailed industry. Thus, a change in the mix of industries over time can by itself cause a change

in the average wage, apart from any change in actual wage levels.3

In contrast, the average wage in the higher-educational-attainment service-providing

industries grew throughout the historical period. In fact, we estimate that in 2015, the average

wage in those industries, for the first time, exceeded the average wage in the blue-collar

industries. As shown in figure 8, the wage gap in favor of the higher-educational-attainment

service industries compared with the blue-collar industries is expected to widen throughout the

forecast period.

The average wage in the lower-educational-attainment service industries grew steadily

from 1992 through 2002, reaching a peak of $29,061 (in 2014$). Wages in these industries then

declined through 2014, when the average wage was $25,422. We estimate that wages in this

group of industries increased sharply in 2015 (4.2 percent), and we predict that inflation-adjusted

wages will continue to increase over the next three years, albeit at a more modest pace.

More detail on the time pattern of wage growth is shown in figure 9. The time periods

shown in this figure—1990–2000; 2000–2007; 2007–2015; and 2015–2018—reflect the peak-to- 3For example, say that an aggregate industry is composed of two detailed industries, A and B. In time period 1, industry A accounts for 60 percent of the aggregate category and pays an average wage of $70,000 a year. Industry B accounts for 40 percent of the aggregate and pays an average wage of $30,000 a year. This would mean that the aggregate industry category has an average wage of $54,000 (0.6 x $70,000 + 0.4 x $30,000). In the second time period, assume that wages in the individual industries remain the same, but that industry A loses jobs and industry B gains jobs, so that they both now account for 50 percent of the aggregate category. Even though wages in neither individual industry declined, the average wage in the aggregate category will fall to $50,000 (0.5 x $70,000 + 0.5 x $30,000). So, part of the reason for the big decline in the average wage in the blue-collar industries after 2007 was the disproportionate loss of jobs in relatively high-wage industries such as motor vehicle manufacturing. The other reason for the decline in blue-collar wages is that the wages of the auto industry itself actually did fall sharply.

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peak time periods of the national business cycle, with the exception that the forecast period

(2015–2018) is shown separately. (We are not expecting the business cycle to peak in 2018; that

is simply the end of our forecast period.)

Real wages across all industries grew by 1.2 percent per year between 1990 and 2000,

then slowed to 0.6 percent per year between 2000 and 2007, and then slowed further, to only 0.2

percent per year on average between 2007 and 2015. All of the growth in that period is in fact

due to the jump in the real wage in 2015; the average real wage in 2014 was below the average

real wage in 2007. We are forecasting that the average real wage in the county will grow by a

healthy 2 percent per year for the next three years.

The average wage in the blue-collar industries grew rapidly during the 2000–2007 period,

but then fell sharply after 2007. The primary reason for the big decline was the collapse in the

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average wage in the motor vehicle manufacturing industry. In 2007, the average wage in that

industry was $112,821, as most local auto workers enjoyed Detroit Three pay scales with lots of

overtime and bonuses. The Great Recession caused the wages of the Detroit Three to drop as

long-term employees saw their wage rates frozen and new workers were hired in at much lower

wages, but even more important locally was the shift in the ownership of the local plants to

lower-wage independent producers. By 2015, the average wage in the local motor vehicle

manufacturing industry was down to $61,122 (in 2014$). Now, however, we are forecasting that

wages in the blue-collar industries will begin growing again, with growth averaging 1.3 percent

per year over the forecast period.

Wages in the lower-educational-attainment service-providing industries fell over the

entire 2000–2015 period; even the big jump in the real wage in 2015 was insufficient to

compensate for the decline in the earlier years. Consequently, the average wage in these

relatively low-wage industries in 2015, adjusted for inflation, was 6 percent below 2000 levels.

We predict that the average wage in these industries will grow by 1.7 percent per year in the

forecast period, but this will still leave the average wage about 1 percent below 2000 levels.

The big winner, in terms of wage growth, has been the higher-educational-attainment

service-providing industries. These industries enjoyed real wage growth of almost 1 percent per

year between 2000 and 2015, adjusted for inflation, while wages in the other industry categories

were declining. These industries are also expected to see the most rapid wage growth over the

next three years, averaging 2.1 percent per year. This is also the largest group of workers in

Washtenaw, accounting for almost two-thirds of all employment in the county in 2018.

Employment by Industry

The projected job movements shown in total in figure 6 are distributed among twenty-

three major industry divisions in table 3, and into 174 finer divisions in the appendix. The detail

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for the forecast presented in table 3 includes, for each industry, the level of employment in 2015

(including two quarters of preliminary data); the forecast change for 2016, 2017, and 2018; and

the cumulative change over the three-year period 2015–18. The table also includes the average

annual wage for each industry category in 2014, as does the appendix.4

Total employment is forecast to grow by 3,041 jobs, or 1.5 percent, in 2016. Job gains

are then forecast to pick up a bit to 3,713 (1.8 percent) in 2017, and 3,840 (also 1.8 percent) in

2018.

The private goods-producing sector is forecast to add only 407 jobs over the next three

years, as job losses in transportation equipment manufacturing (–162) partially offset modest job

gains in natural resources and mining (34), construction (234), and other manufacturing (301).

The manufacturing industries that we anticipate will gain the most jobs over the next

three years are computer and electronics products (108), chemicals (43), food (40), medical

equipment and supplies (36), and other miscellaneous manufacturing (50). In addition to

transportation equipment, manufacturing industries that we expect to lose jobs include book

printing (–62) and fabricated metal products (–16).

Job growth in the private service-providing sector in 2016 is forecast to slow to 1,782

(1.6 percent) compared with a gain of 2,897 (2.7 percent) in 2015. Job gains then increase to

2,337 in 2017 and 2,506 in 2018.

The slowdown in job gains in 2016 is most pronounced in trade, transportation, and

utilities. This sector added 684 jobs in 2015, but adds only a little more than half as many jobs

(356) in 2016. Much of this slowdown reflects smaller job gains in wholesale trade and

transportation services, which added jobs at an unsustainably rapid rate in 2015. Still, job gains 4The historical employment data are from the Bureau of Labor Statistics Quarterly Census of Employment and Wages. The average annual wage includes both full- and part-time workers, weighted equally. Consequently, the average wages for industries that employ a disproportionately large number of part-time workers, such as retail trade and leisure and hospitality, are much lower than they would be if the wages were calculated only for full-time workers.

23

in wholesale trade (123 or 2.5 percent) and transportation and utility services (135 or 3.9 percent)

are very strong in 2016 and subsequent years.

Job growth in retail trade in 2016 and in later years is the weakest of any major industry

outside of the manufacturing sector. Over the next three years, the retail sector gains only 374

jobs (2.3 percent). Within the retail sector, the greatest job gains are in clothing stores (81),

grocery stores (73), pharmacies and drug stores (64), and automobile dealerships (44). Retail

industries that lose jobs include general merchandise stores including department stores (–59)

and electronics and appliances (–31). Job growth in the retail sector is limited by technological

change, the Internet replacing brick-and-mortar stores, and rising labor costs driven by growing

labor shortages and an increasing minimum wage.

The information sector is projected to add 265 jobs over the next three years. While

newspaper and book publishers continue to shed jobs over the period, these losses are more than

offset by gains in software publishing (108 jobs or 7.1 percent) and other information services,

including Internet publishing and web search portals (145 or 11.4 percent).

The financial activities sector adds 309 jobs between 2015 and 2018. Most of the job

gains are in finance and insurance (218), with a smaller gain in real estate and rental and leasing

(91). These job gains do not include the anticipated improvement in the local residential real

estate industry, because almost all real estate agents are self-employed and thus are not counted

in the data on establishment employment shown here.

The professional and technical services industry is forecast to add 470 jobs this year, with

job gains inching up to 483 in 2017 and 488 in 2018. Over the three-year forecast period,

professional services is forecast to add 1,441 jobs (9.4 percent). With this gain, professional

services accounts for about one in every seven jobs created in the county, nearly double its share

of the county’s employment base in 2015).

Table 3 Forecast of Employment in Washtenaw County by Major Industry Division*

2016–18 Average Employment Change Annual Estimate Forecast Wage 2015 ’15 –’16 ’16 –’17 ’17 –’18 ’15 –’18 2014 TOTAL JOBS (Number of persons) 202,393 3,041 3,713 3,840 10,594 $53,206 (Annual percentage change) (1.9) (1.5) (1.8) (1.8)

TOTAL PRIVATE 127,355 1,892 2,504 2,636 7,032 51,056

GOODS-PRODUCING 18,108 110 167 130 407 62,086 Natural resources, mining, construction 3,845 44 122 102 268 54,709 Manufacturing 14,263 65 46 28 139 64,065 Motor vehicles 4,175 –23 –68 –71 –162 65,033 Other manufacturing 10,088 88 114 99 301 63,651

PRIVATE SERVICE-PROVIDING 109,247 1,782 2,337 2,506 6,625 49,211 Trade, transportation, and utilities 24,508 356 388 409 1,153 41,712 Wholesale trade 4,848 123 119 127 369 70,156 Retail trade 16,163 98 131 145 374 28,576 Transportation, warehousing, and utilities 3,497 135 138 137 410 66,454 Information 4,516 83 84 98 265 82,468 Financial activities 6,617 101 125 83 309 63,996 Professional and business services 26,584 545 837 789 2,171 69,181 Professional, scientific, and technical 15,284 470 483 488 1,441 87,187 Management of companies and enterprises 1,045 40 31 16 87 191,985 Administrative support and waste management 10,255 35 323 285 643 31,380 Private education and health services 25,762 500 617 757 1,874 50,668 Leisure and hospitality 16,212 111 190 247 548 16,971 Other services 4,860 86 95 124 305 29,761 Unallocated private services 190 –1 0 0 –1 56,246

GOVERNMENT 75,039 1,148 1,209 1,204 3,561 56,788 State government 59,725 918 1,052 1,073 3,043 57,461

*Some subtotals do not add to totals due to rounding of annual average computations.

24

25

Within the professional and technical services industry category, the largest job gains

over the next three years are in computer systems design (436), testing laboratories (321), and

physical, engineering, and biological research (237). These are all very well-compensated

industries, with an average salary in 2014 of over $85,000 a year. They also tend to employ lots

of relatively well-educated workers, those with at least a bachelor’s degree. The success of

Washtenaw County in creating jobs in these industries has been a major contributing factor to the

county’s economic prosperity over the past several decades.

Employment in the management and corporate headquarters industry added 236 jobs in

2015. Over the forecast period, this extremely well-compensated industry (average pay in 2014

of $191,985) adds a more modest 87 jobs.

The administrative support and waste management industry adds 643 jobs over the next

three years, most of them in 2017 and 2018. Within this industry category, almost two-thirds of

the job growth is in employment services, which mostly consists of the temporary help services

industry. This industry tends to grow very strongly in the first year of an economic recovery; for

example, between 2009 and 2010 it added over 1,000 jobs in Washtenaw County. But as the

economic recovery matures, more and more employers add permanent staff instead of hiring

temporary workers. On the other hand, when the labor market gets tight, employers use the

services of temporary help firms to fill their employment needs as they cannot find permanent

hires among the relatively small pool of available workers. This explains the more robust

employment growth expected in this industry in 2017 and 2018.

The private education and health services sector lost jobs in both 2013 (–141) and 2014

(–118), after having added jobs every year since 1999. Employment in the private education

services sub-industry grew in 2013, but then declined sharply in 2014; it rebounded in 2015 and

is forecast to grow by 257 jobs over the next three years.

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The much larger private health care and social services industry—88 percent of all jobs in

the aggregate category—lost jobs in 2013, but began growing again in 2014. Job growth

accelerated in 2015 and continues to expand at an increasing pace over the forecast horizon,

adding 1,617 jobs (7.1 percent).

The greatest employment gains in private health care over the next three years are in

nursing and other residential care facilities (606 or 13.3 percent); physicians’ offices (424 or 10.5

percent); and outpatient care centers, diagnostic laboratories, and ambulance services (246 or

17.0 percent). Employment in private hospitals, by contrast, barely increases over the next three

years (44 or 0.7 percent).

Employment in the leisure and hospitality sector grew rapidly between 2009 and 2014,

averaging 3.7 percent per year, but then slipped to only 1.1 percent in 2015, and is expected to

slow further in 2016, to 0.7 percent. Over the following two years, growth comes in at 1.3

percent per year. This sector includes arts and recreation, food services and drinking places, and

hotels. The arts and recreation industry, which is projected to gain 160 jobs (7.3 percent) over

the forecast horizon, includes businesses such as golf courses, fitness facilities, and the

performing arts. (Much of the last category resides in the universities in Washtenaw County, and

thus is not counted here.)

Employment at local hotels and other lodging places continues to decline slowly. Full-

service restaurants add 278 jobs (4.6 percent), but limited-service restaurants, better known as

fast-food restaurants, lose 12 jobs over the next three years. That decline may seem surprising,

but it is worth noting that the number of jobs at fast-food restaurants also declined in the 1998 to

2000 period, when a very low unemployment rate made it virtually impossible for employers to

find additional workers.

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The miscellaneous other services sector includes a grab bag of individual industries such

as repair services, including motor vehicle repair shops; personal services, such as hair salons

and dry cleaners; membership organizations; and private household services. Collectively these

industries add 305 jobs (an increase of 2 percent per year) over the forecast period. The largest

job gains occur in private household services (92); religious, business, and grant-making

organizations (80); and automotive repair and maintenance shops (54).

The government sector grows by 3,561 jobs (1.6 percent per year) over the forecast

horizon. Federal government employment increases slightly (139 jobs), as job additions at the

Veterans Hospital in Ann Arbor more than offset job losses at the U.S. Postal Service and other

federal government offices.

Employment in local government, which includes public K-12 education and Washtenaw

Community College, lost jobs every year between 2010 and 2015 even as the rest of the

economy was adding jobs. We anticipate that this period of job loss will finally come to an end

in 2016, with a modest gain of 379 jobs over the next three years.

State government, which includes Eastern Michigan University, the University of

Michigan, and the University of Michigan Health System, has gained jobs every year since 2000

(averaging 2.2 percent per year). Clearly, these institutions have been the foundation for the

region’s economic stability over the past decade. We expect that employment growth will

continue over the next three years, albeit at a slightly slower pace, averaging 1.7 percent per

year.

The local economy has thrived over the past fifteen years, despite very large job declines

in the motor vehicle manufacturing industry and the loss of two of our signature private-sector

employers, Pfizer and Borders. In has thrived in spite of these losses because of the presence of

the universities and the University of Michigan Health System, along with many other

28

knowledge-intensive firms in the private sector, especially in information technology. Our

forecast indicates that this trend will continue over the next three years.

Unemployment

As shown in figure 10, the solid job growth we are projecting for Washtenaw County is

accompanied by an unemployment rate that moves down from 3.6 percent in 2015 to 3.2 percent

in 2016, and then declines systematically over the rest of the forecast period into rarified air, to

2.8 percent in 2017 and 2.5 percent in 2018. The drop of more than a percentage point over the

three-year period brings the jobless rate into the neighborhood of where it was in 2000, a year

that bordered the golden era of the second half of the 1990s. During that earlier stretch, the

county unemployment rate hit its historical low of 1.6 percent in 1999. If our forecast of the

unemployment rate proves correct, the county labor market could be approaching full

employment over the next three years.

We expect the county’s labor force to grow smartly through 2018 as improving job

opportunities encourage more people to reenter the labor force in the hope of finding

29

employment. If, instead, the labor force expands at a slower pace than we anticipate, then the

unemployment rate would fall more rapidly with the employment gains we are projecting.

The jobless rate for the county continues to be well below the U.S. rate over the forecast

horizon, as shown in figure 10. The gap between the two rates widens slightly in the county’s

favor in the forecast period, from 1.5 percentage points in 2016 to 1.8 percentage points in 2018.

Inflation

Our forecast of local inflation, measured by the growth rate of the Detroit Consumer

Price Index (CPI), is shown in figure 11. (Consumer price data are compiled at the regional

level; they are not available for the county in isolation.) Local prices increased modestly by 1

percent for 2014, before plummeting by 1.4 percent in 2015. The recent decline in local prices

is widespread across spending categories, not simply reflecting the sharp drop in energy prices,

which we find a bit puzzling. We judge the broadly based drop to be temporary, however, and

accordingly we expect inflation to rebound to a still-modest rate of 1.1 percent in 2016. The

pickup in the inflation measure is due in part to our expectation that oil prices will stabilize and

start creeping up during 2016, relieving some downward pressure on inflation. Local inflation

then rises to 2.3 percent in 2017 and holds there, more or less, in 2018, with more robust wage

growth and slowly rising oil prices putting some upward pressure on consumer prices.

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Conclusion

In 2014, Washtenaw County saw the smallest annual increase in jobs during the current

recovery, 1,426 (0.7 percent). As we anticipated last year, the economy rebounded strongly in

2015, adding an estimated 3,732 jobs (1.9 percent). Our outlook for the county economy is

upbeat over the next three years, supported by sustained expansion of the U.S. economy and by

the county’s strong economic fundamentals—a highly educated populace combined with

enterprises associated with the New Economy.

Specifically, we see the county adding a total of 10,594 jobs over the next three calendar

years: 3,041 in 2016, 3,713 in 2017, and 3,840 in 2018. That would extend the run of job growth

to nine straight calendar years, besting the previous record of eight years between 1982 and

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1990. There is no nine-year period since 1990 that can rival the 31,816 jobs created on an annual

basis from 2009 to 2018 if our forecast proves correct, although there was stronger growth

during the 1980s. According to our forecast, by the end of 2018, the county economy would

boast 18,124 more jobs than it achieved at its previous peak level of employment in the summer

of 2002.

The largest job gains over the forecast period are expected in higher education, health

care services, information technology, and research and development. That the job profile for

Washtenaw is dominated by these industries is entirely consistent with its performance over the

recovery period to date and with its traditional strength and its image. Most of these industries

pay well above average wages in the county. On the other hand, we anticipate relatively small

job gains in manufacturing, retail trade, and restaurants, and a decline in jobs in motor vehicle

manufacturing and fast-food restaurants.

Movements in the average real wage in Washtenaw have been sluggish for some time,

but began to pick up in 2014, increasing by 1.5 percent then. In 2015, a 1.4 percent decline in

the local price level converted a nominal wage gain of 3.2 percent into a real wage gain of 4.6

percent. Real wages increase by an additional 2.6 percent in 2016 as price inflation turns weakly

positive. Growth in real wages slips to 1.8 percent in both 2017 and 2018 as local price inflation

moves above 2 percent. This would be the strongest period of wage growth in the county since

the second half of the 1990s.

We are forecasting that the unemployment rate will fall by 1.1 percentage points over the

next three years, from 3.6 percent recorded for 2015 to 2.5 percent in 2018, the lowest rate in the

county since 2000. And this occurs with a significantly expanding labor force. If our forecast of

the unemployment rate proves correct, the county labor market could be approaching full

employment over the next three years.

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The primary risks to the forecast include: (1) the extent of the deceleration of GDP

growth in China; (2) the path of the value of the dollar; (3) the effect of the 2016 national

elections on government spending; (4) the possibility of a more aggressive timing of rate hikes

by the Federal Reserve; (5) the uncertain path of oil prices; (6) natural causes, particularly

abnormal weather; and (7) locally, growing shortages of labor with the tightening labor market.

At the beginning of this report we posed the question of whether this promising county

economy could become a truly great economy in the next few years. The criteria we established

to achieve that status were sustained job growth over the forecast period, in fact approaching a

full-employment economy with greatly reduced slack in the labor market, combined with

growing real wages and moderate inflation. Our forecast suggests that all of that will come to

pass over the next three years. It doesn’t get any better than that.

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Appendix Forecast of Jobs in Washtenaw County by Detailed Industry Division

Estimated Forecast Average Wage 2015 2016 2017 2018 2014 Total wage and salary employment 202,393 205,434 209,147 212,987 $53,206 Total government 75,039 76,187 77,396 78,600 56,788 Federal government 3,971 4,009 4,057 4,110 76,731 Post office 492 483 472 462 64,119 Hospital 2,623 2,683 2,749 2,816 74,689 Other federal government 857 843 836 832 89,736 State government 59,725 60,643 61,695 62,768 57,461 Local government 11,342 11,535 11,645 11,721 46,597 Education and health services 7,063 7,180 7,247 7,264 44,392 Other local government 4,279 4,355 4,398 4,457 50,361 Total private 127,355 129,247 131,751 134,387 51,056 Goods-producing 18,108 18,218 18,385 18,515 62,086 Natural resources and mining 208 230 236 242 26,486 Construction 3,637 3,659 3,775 3,871 56,506 Buildings 983 1,012 1,049 1,064 53,813 Residential 564 592 627 637 40,630 Nonresidential 419 420 422 427 72,247 Heavy and civil engineering construction 346 330 328 329 64,760 Specialty trade contractors 2,308 2,318 2,398 2,478 56,143 Building foundation and exterior 378 383 397 411 43,410 Building equipment 1,232 1,235 1,275 1,318 64,433 Building finishing 444 440 450 461 46,708 Other specialty trade 254 260 276 288 55,586 Manufacturing 14,263 14,328 14,374 14,402 64,065 Food 824 837 851 864 42,746 Printing and related support activities 1,867 1,864 1,858 1,851 41,586 Books 1,136 1,115 1,095 1,074 44,583 Other printing and related 731 749 763 777 36,408 Chemicals 699 716 730 742 71,699 Plastics and rubber products 1,261 1,245 1,252 1,257 97,406 Fabricated metal products 1,222 1,204 1,207 1,206 54,841 Machine shops and threaded products 693 691 708 721 56,725 Other fabricated metal products 530 513 499 485 52,421 Machinery 903 911 924 937 71,571 Commercial and service industry 185 194 199 204 70,492 Metalworking 332 332 338 345 68,132 Other machinery 386 385 387 388 74,726 Computer and electronic products 1,151 1,190 1,224 1,259 76,097 Computer and peripheral products 45 44 43 42 74,817 Semiconductor and electronic components 533 572 605 639 75,781 Electronic instruments 559 560 563 564 75,846 Other computer and electronic products 14 14 14 13 101,270 Transportation equipment 4,175 4,152 4,084 4,013 65,033 Miscellaneous manufacturing 1,425 1,456 1,483 1,511 70,549 Medical equipment and supplies 913 925 937 949 79,825 Other miscellaneous manufacturing 512 531 546 562 52,321 Other manufacturing 735 753 762 764 56,305

34

Appendix (continued) Forecast of Jobs in Washtenaw County by Detailed Industry Division

Estimated Forecast Average Wage 2015 2016 2017 2018 2014 Private service-providing 109,247 111,029 113,366 115,872 $49,211 Trade, transportation, and utilities 24,507 24,864 25,251 25,661 41,712 Wholesale trade 4,848 4,971 5,090 5,217 70,156 Merchant wholesalers, durable goods 2,436 2,496 2,557 2,617 76,136 Merchant wholesalers, nondurable goods 1,778 1,826 1,877 1,934 59,971 Electronic markets and agents and brokers 634 648 657 666 76,761 Retail trade 16,163 16,261 16,392 16,537 28,576 Motor vehicles 1,726 1,747 1,767 1,787 54,049 Automobiles 1,320 1,337 1,350 1,364 57,768 Other motor vehicles 406 410 417 423 41,814 Furniture and home furnishings 507 515 523 523 35,606 Electronics and appliances 688 673 664 657 41,385 Building materials and garden supplies 1,276 1,272 1,279 1,290 37,011 Food and beverages 3,476 3,503 3,545 3,593 22,866 Grocery stores 2,944 2,951 2,980 3,017 23,410 Specialty food stores 399 420 432 445 20,029 Beer, wine, and liquor stores 133 132 132 132 18,807 Health and personal care stores 1,179 1,198 1,221 1,248 35,462 Pharmacies and drug stores 874 895 915 937 36,296 Other health and personal care stores 305 302 306 310 33,395 Gasoline stations 531 539 550 562 16,680 Clothing and accessories 1,350 1,381 1,406 1,432 17,473 Sporting goods, hobby, book, music stores 703 708 715 722 17,493 Sporting goods and musical instruments 549 556 564 573 17,247 Books, periodicals, and music 154 152 151 149 18,493 General merchandise 3,253 3,234 3,213 3,195 21,771 Department stores 1,577 1,579 1,566 1,555 19,963 Other general merchandise stores 1,676 1,656 1,647 1,640 23,399 Miscellaneous store retailers 905 913 924 935 18,855 Nonstore retailers 568 576 585 593 38,873 Transportation and warehousing 3,014 3,144 3,277 3,409 55,707 Truck transportation 886 933 980 1,026 57,585 Other transportation and warehousing 2,128 2,211 2,296 2,383 54,734 Utilities 483 488 493 498 130,072 Information 4,516 4,599 4,683 4,781 82,468 Publishing industries, except Internet 1,887 1,918 1,946 1,976 78,467 Newspaper, book, and directory publishers 354 348 341 335 58,557 Software publishers 1,533 1,570 1,605 1,641 83,084 Telecommunications 415 417 417 418 58,607 Data processing, hosting, and related services 944 958 966 974 85,576 Other information 1,269 1,306 1,354 1,414 95,262 Financial activities 6,617 6,718 6,843 6,926 63,996 Finance and insurance 4,343 4,423 4,516 4,561 73,423 Credit intermediation and related activities 2,524 2,558 2,598 2,582 60,851 Depository credit intermediation 1,223 1,230 1,233 1,238 56,373 Other credit intermediation and related 1,301 1,328 1,365 1,344 65,673 Insurance carriers and related activities 1,073 1,090 1,112 1,143 72,175 Insurance carriers 459 467 480 500 69,707 Insurance agencies and brokerages 614 622 632 642 73,969 Other finance 746 775 806 837 121,878

35

Appendix (continued) Forecast of Jobs in Washtenaw County by Detailed Industry Division

Estimated Forecast Average Wage 2015 2016 2017 2018 2014 Financial activities (continued) Real estate and rental and leasing 2,274 2,295 2,327 2,365 $47,348 Real estate 1,962 1,976 1,999 2,030 44,330 Lessors of real estate 940 947 953 962 45,024 Offices of real estate agents and brokers 321 319 325 335 47,248 Activities related to real estate 701 710 721 733 42,132 Rental and leasing services 201 209 214 218 37,399 Lessors of nonfinancial intangible assets 111 110 113 117 114,333 Professional and business services 26,584 27,129 27,966 28,755 69,181 Professional and technical services 15,284 15,754 16,237 16,725 87,187 Legal services 937 940 951 964 82,284 Accounting and bookkeeping 665 704 710 719 54,013 Architectural and engineering 3,858 3,982 4,112 4,244 101,558 Engineering 1,226 1,233 1,249 1,260 92,798 Testing laboratories 2,264 2,368 2,473 2,585 112,251 Other architectural and engineering 368 380 390 400 66,752 Specialized design 252 258 269 282 56,263 Computer systems design and related services 2,775 2,928 3,080 3,212 85,897 Management and technical consulting 2,036 2,049 2,076 2,112 93,669 Scientific research and development 3,185 3,274 3,356 3,431 96,062 Physical, engineering, and bio. research 2,950 3,034 3,114 3,187 98,886 Social science and humanities research 235 240 242 244 61,469 Advertising, PR, and related services 239 241 246 252 51,375 Other professional and technical services 1,337 1,377 1,436 1,510 50,506 Management of companies and enterprises 1,045 1,085 1,116 1,132 191,985 Administrative and waste services 10,255 10,290 10,613 10,898 31,380 Administrative and support services 9,738 9,737 10,064 10,347 30,099 Office administrative services 609 614 622 631 105,634 Employment services 5,793 5,753 6,005 6,209 22,030 Business support 571 579 588 597 31,174 Services to buildings and dwellings 1,919 1,938 1,974 2,015 25,622 Other administrative and support services 845 852 876 896 37,172 Waste management and remediation services 518 553 549 551 58,965 Private education and health services 25,762 26,262 26,879 27,636 50,668 Private educational services 3,089 3,155 3,235 3,346 35,857 Private elementary and secondary schools 1,034 1,055 1,079 1,104 38,934 Other private educational services 2,055 2,099 2,156 2,242 34,258 Private health care and social assistance 22,673 23,108 23,644 24,290 52,554 Ambulatory health care services 9,351 9,585 9,873 10,223 67,792 Offices of physicians 4,050 4,153 4,293 4,473 101,972 Offices of dentists 1,234 1,248 1,266 1,292 52,548 Offices of other health practitioners 564 579 593 609 40,112 Home health care services 2,054 2,093 2,122 2,153 28,079 Other ambulatory health care services 1,449 1,512 1,598 1,695 52,155 Nursing and residential care facilities 4,554 4,728 4,928 5,161 27,676 Community care facilities for the elderly 2,055 2,120 2,189 2,269 30,600 Other nursing and residential care facilities 2,499 2,607 2,739 2,892 25,290 Individual and family services 862 868 870 875 21,398 Child day care services 1,140 1,162 1,190 1,221 19,212

36

Appendix (continued) Forecast of Jobs in Washtenaw County by Detailed Industry Division

Estimated Forecast Average Wage 2015 2016 2017 2018 2014 Private health care and social assistance (cont.) Hospitals, emergency relief, and vocational rehabilitation services 6,766 6,764 6,783 6,811 $57,663 Leisure and hospitality 16,212 16,323 16,513 16,760 16,971 Arts, entertainment, and recreation 2,192 2,204 2,266 2,352 22,502 Amusements, gambling, and recreation 1,765 1,783 1,837 1,902 18,185 Golf courses and country clubs 537 554 565 577 20,233 Fitness and recreational sports centers 945 946 983 1,031 17,443 Other amusements, gambling, recreation 283 283 289 294 16,315 Performing arts, spectator sports, museums, and parks 427 421 430 450 41,584 Accommodation and food services 14,019 14,119 14,246 14,407 16,155 Accommodation 1,082 1,066 1,068 1,072 21,536 Food services and drinking places 12,938 13,053 13,178 13,335 15,699 Special food services 958 983 1,008 1,032 19,954 Drinking places, alcoholic beverages 714 724 741 765 17,348 Restaurants and other eating places 11,265 11,346 11,428 11,538 15,253 Full-service restaurants 5,998 6,098 6,184 6,276 17,096 Limited-service restaurants 4,549 4,534 4,526 4,537 13,451 Cafeterias and nonalcoholic beverage bars 719 714 719 725 11,656 Other services 4,860 4,946 5,041 5,165 29,761 Repair and maintenance 900 924 940 956 36,984 Automotive repair and maintenance 768 789 805 822 37,216 Other repair and maintenance 132 135 134 134 35,390 Personal laundry services 1,509 1,525 1,555 1,593 27,998 Personal care services 967 971 986 1,009 32,066 Other personal and laundry services 542 554 569 584 21,054 Membership associations and organizations 1,790 1,806 1,831 1,864 32,938 Civic and social organizations 546 543 540 539 20,772 Labor unions and similar labor organizations 141 140 140 142 25,589 Other membership associations and org. 1,103 1,123 1,151 1,183 40,271 Private households 661 691 715 752 15,244 Unallocated private services 190 189 189 189 56,246 Addendum Unemployment rate 3.6 3.2 2.8 2.5