Jacobs: ‘Growth and optimism will continue through 2013’
Posted January 21, 2013
Acknowledging challenges as the fragile economy recovers from the downturn, Jim Jacobs forecasted a mostly optimistic outlook of continued economic growth for Macomb County in 2013.
“Recovery in 2013 will continue, but it’s going to be somewhat muted,” said Jacobs, an economist and president of Macomb Community College, during the 29th annual Macomb County economic forecast. He delivered the address Jan. 16 at Zuccaro’s in Chesterfield Township.
“We should see unemployment fall below 9 percent, maybe to 8.5 percent,” he added. Macomb County’s unemployment rate was last recorded at 9.4 percent. “More individuals will enter the payrolls in Macomb County businesses.”
Though sure to face some challenges — for instance, the changing nature of health care reform, and the need for more community development at the south end of the county — Macomb County should continue to fair better than the national and state economies, Jacobs said.
Looking back at 2012, he said that Macomb County’s labor force increased for the first time in years, as about 6,000 new jobs were created for unemployed workers.
However, the state’s and county’s growth, he said, were both very closely tied to growth in the auto industry.
“Manufacturing remains, in Macomb County, clearly the bright spot,” he said, adding that Chrysler, Ford and General Motors all have plans for expanding their facilities and hiring.
The North American Car of the Year award winner, the Cadillac ATS, was developed at the General Motors Technical Center in Warren. Chrysler’s Ram 1500, also manufactured in Warren, won Truck of the Year.
But while the recovery has been based around the auto industry, it seems as though the boom in auto sales has peaked, he said. In light of this, Jacobs raised the question, “What is that next stage that is going to keep the county growing and developing?”
The county’s defense sector continued to fuel local economic growth, he said.
For example, the U.S. Army Detroit Arsenal plants in Warren, TACOM and TARDEC, have grown from 2,200 employees in 2000 to 8,000 employees, he said. TACOM spends about $1 billion in local supply contracts in the metro Detroit area, he said.
“The kind of countywide efforts are now paying off hugely in communities. We’re leveraging resources in ways that have never before been seen in the county. And I think there’s a growing, broad vision,” Jacobs added.
Jacobs also said the new executive form of government has had a profound impact on the county, both internally and externally.
Meanwhile, residential housing sales in 2012 increased, both in terms of the number of homes sold, and in the prices, he said.
“The foreclosure crisis still exists. But for the last 24 months, the numbers of foreclosures in Macomb County have actually declined,” he added. “Overall, the housing market has rebounded in Macomb County somewhat better than in other areas of the country.”
Residential building permits have increased in the tri-county area, Jacobs said, and projections indicate that a handful of communities in the northern end of the county might see tax-assessment increases, and the declines in the other communities have leveled off.
Still, the county’s overall economic state is still below its high point in 2000, he said.
And the county isn’t without its challenges, like the overall decline seen in the county’s median household income, which reportedly fell 28 percent from 1999 to 2010, down to $49,160, he said.
The number of food assistance recipients also has begun to level off, but reports from the Macomb Food Program indicate there are still large numbers of people in need. In 2012, the program handed out more than 2.2 million pounds of food to almost 58,900 households.
Jacobs’ forecast also traced national trends and issues, like the effects of health care reform.
He likened developing the annual forecast to making a cake, layering economic data from the national and state levels with reports from county agencies and information garnered by talking with local professionals, like real estate agents.
County Executive Mark Hackel said it was good to hear an economist use stats to back the perception that there was “a positive momentum here in Macomb County.”
County Commissioner David Flynn, recently elected by the Macomb County Board of Commissioners to a two-year term as board chair, was among those who attended the forecast.
“We need to be cautious and understand that this is going to be an incremental recovery,” Flynn said. “We should use this time to plan for not just a year or two down the road, but for a generation from now.”
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