Forecast: Macomb Jobs Outlook Improving

Posted on February 1, 2011

Macomb County is adding jobs and its jobless rate will fall this year to its lowest level since autumn 2008 — but not without major erosion to property values and its middle-class identity, Macomb Community CollegePresident James Jacobs predicted today.

Jacobs told an audience of nearly 300 at Zuccaro’s Country House in Chesterfield Township that the county’s labor force expanded 2.3 percent to 353,976 people in November, compared with 345,888 a year earlier.

The unemployment rate, now around 12.4 percent, could fall below 10 percent as industry segments such as health care, education and defense contracting continue to add jobs. But Jacobs expects the total drop in unemployment will be a mix of people going back to work and those who fall off the jobless rolls and exit the labor market.

The profitability for Ford Motor Co., Chrysler Group LLC and General Motors Co. “will be all but assured this year, and the effects of that on Macomb County are going to be pretty startling,” he said today.

Jacobs points to automaker analyst predictions that U.S. auto sales will fall to between 12.5 million and 13 million in 2011, compared with 11.4 million in 2010.

Not all news is rosy. Median household income fell 17.7 percent from 1999 through 2008. And Jacobs said the county’s second-largest city, Sterling Heights, saw family incomes fall 33 percent from 2000 to 2009, one of the largest drops in the nation for one community.

The nonprofit Macomb Food Program, which provides emergency assistance against hunger, reported serving 151,150 individuals in the county during 2010, compared with 90,783 in 2008.

“There will also be a large number of people joining what often gets called the ‘underground economy’ — working off the books or not contributing any state or federal income tax,” Jacobs said. “This will mean an increasing number of people at both the top and bottom” of the economy.

Property tax assessments also fell in every community of the county, ranging from 1 percent to more than 13 percent, and Jacobs predicts an additional 10 percent decline in assessments during 2011.

Macomb County Executive Mark Hackel, who attended the annual Jacobs presentation, said it highlighted Macomb’s need to market its growing defense industry corridor in Warren, Sterling Heights and Shelby Township on a regional level, for economic attraction and jobs growth.

The executive expects to roll out new proposals for the county’s Planning and Economic Development Department by midyear, as part of a government restructuring proposal he is supposed to submit to theMacomb County Board of Commissioners in his first 180 days in office.

About 60 percent of defense contracts awarded in Michigan, and almost 7 percent of all contracts nationally, are awarded to contractor companies and their suppliers based in Macomb.

Hackel said he foresees an economic development strategy that is “about 85 percent” focused on small-business development or an economic gardening approach to building existing business within the county, while 15 percent of efforts could be directed regionally to courting new business.

“If Brooks (Patterson, Oakland County executive) has an opportunity in health care to do something for his Medical Main Street program, I want to support that. The same thing goes for (Wayne County Executive) Bob Ficano in developing his regional aerotropolis.

“But for the defense industry, Macomb has that regional asset. I’d like to see us all work as a region toward targeting each of those assets. There are some other miscellaneous industries where the counties might compete with each other, but for the most part we should collaborate.”

Jacobs said local defense contractors can continue to find growth even as the Pentagon shrinks its budget in the coming years, through a combination of repairs and remodeling on existing military equipment and the “internationalization” of the industry through sales to foreign governments.

Newly appointed Macomb County commission Chairwoman Kathy Vosburg also called the total economic forecast encouraging as a whole and said she expects the county will pursue primarily the economic gardening strategy of encouraging local business growth and expansion during the year.

The event was sponsored by Wayne State University and hosted by the Macomb County Chamber Alliance.