MCC president predicts year of solid, sustained growth in Macomb County
January 22, 2014
MACOMB COUNTY — A local expert believes that Macomb County will enjoy strong economic activity in 2014, thanks to the continued recovery of the domestic auto industry, the expansion of defense manufacturing, declining unemployment, increased home sales, a clearer regional identity and improved governmental unity.
Dr. Jim Jacobs, president of Macomb Community College (MCC) and a longtime economist, delivered his 30th annual Macomb County Economic Forecast on Jan. 15 before a crowd of about 300 county leaders at Zuccaro Banquets & Catering in Chesterfield Township. In his 45-minute speech, Jacobs detailed the reasons he predicts that Macomb County will experience continued growth this year, if not at quite the same level that it saw from 2010 to 2013.
“Over the last three years, our recovery has exceeded the national recovery, in terms of consistency and intensity,” he said. “However, it has not made up for the major losses of employment and income that county residents endured during the Great Recession.”
Jacobs added that the inconsistency and sluggishness of the U.S. economy has played a major factor in why Macomb County’s recovery has been solid but not spectacular.
“The (national) economic recovery has continued, but it’s somewhat unclear what the direction and the intensity of that recovery is,” he said. “It has been a somewhat choppy recovery. We’re moving forward, but it’s not as steady and not as clear as it has been in the past. … Even with intense economic activity, we still have not reached the kind of growth patterns that existed in the 1960s, 1970s and 1980s.”
Still, local economic growth has exceeded the national average for four consecutive years, and Macomb County’s population has increased by about 10,000 during that time. These positive developments are primarily due to increased sales in the domestic automotive industry, which added about 15,000 new jobs in 2013 alone. But Jacobs believes that the Big Three automakers must continue to diversify and evolve for that trend to continue.
“The view of Macomb County as a blue-collar production place for automobiles needs to be modified,” he said. “As the automobile industry moves into another phase … we will be central not only as a local employer, but also central as a driver of research and development worldwide.”
Jacobs pointed out that although Macomb County’s unemployment rate decreased from 12.3 percent to 7.8 percent between November 2010 and November 2013, the number of people included in the labor force also declined slightly over that same period. He noted that nationally, workforce participation numbers are currently hovering around 62 percent, which is their lowest level in the past 35 years.
Other areas of the county’s economy have been mixed, as well, Jacobs said. The housing market has been a particularly significant source of economic growth, as the average sale price of privately sold homes rose from less than $110,000 in 2011 to more than $159,000 last year, and nearly every Macomb County municipality is expected to see an increase in property tax revenues in 2014. In addition, the number of residential building permits skyrocketed from just 302 in 2008 to 1,696 in 2013, while the number of home foreclosures declined from 7,414 in 2010 to only 2,757 last year.
At the same time, though, Macomb County’s median household income decreased by more than 27 percent from 1999 to 2012, which is more than double the national average. Accordingly, there has been a substantial increase in demand for the county’s food assistance, welfare and employment programs.
“We are digging out of a huge hole,” Jacobs said. “Recovery is going to continue in 2014, but local growth will be a little less than what we’ve seen because we’re going to see interest rates begin to rise. The forecast for sales in the auto industry are a little more modest than they have been, and consumer sales in general will probably be down a little bit. … I think this is going to be the year where, instead of the consumer pushing the economy along, the push will come from corporate investment and employment expansion.”
Looking ahead, Jacobs was excited about the $134 million data center expansion at the General Motors Technical Center in Warren and the $8.4 million renovation of Macomb Mall, which he called “the first retail reinvestment in the south end of Macomb County in a very long time.” He was also optimistic about the future prospects of metro Detroit’s decades-in-the-making regional transit authority and the county’s new Communications and Technology Operations Center (COMTEC), as well as recent gains that have been made in the local medical and retail sectors.
In order to build on this growth and ensure future success, Jacobs believes that the county should focus on its strengths — namely, sustainable employment and economic development — and everything that makes Macomb County an attractive place to live. In this regard, he contended that the formation of the county’s executive branch and Executive Mark Hackel’s signature Make Macomb Your Home initiative have been major factors in helping the county establish a distinct regional identity and positive image.
Hackel was pleased to see that Jacobs recognized the initiative as a way to highlight local assets and bring new people to Macomb County.
“I think he really hit the nail on the head when he talked about Make Macomb Your Home being not just a slogan, but more of a vision,” Hackel said. “Why do people choose to live here and work here? … We never talked about that before, but then we started to realize all the different things that Macomb County has to offer. And in order to grow that brand even more, we decided, ‘Let’s figure out what makes this place so special and give people more of it.’
Meanwhile, Dave Flynn, chairman of the Macomb County Board of Commissioners, was happy that Jacobs did not sugarcoat the problems currently facing the county. He appreciated the fact that, despite the ongoing economic recovery, the MCC president was mindful of the fact that many residents are still struggling to get by.
The Sterling Heights democrat stated that many of Jacobs’ points were “very similar to what the board hopes to accomplish in the area of service delivery to a diverse and aging population. The commission understands the importance of how education and health care at an early age make a big difference in the success of a student. … And regardless of what we do in county government, if we can’t offer people good economic opportunities, they’re not going to come to live here. People having a decent job makes everything else possible.”
Jacobs ended his speech on a note of cautious optimism. He pointed out that Macomb County’s population has continued to grow because it has attracted residents from neighboring counties, as well as families from overseas. In order to sustain this trend, he asserted, the county must provide more than just jobs, but rather, everything from educational resources to child care to public transportation.
“These new families will become an important source of our future economic growth,” Jacobs said. “If their needs are not considered, then there is a danger that the county will develop into two different sectors, with a significant marginal group of people lacking the opportunity to prosper. … The task at hand is to consolidate these impressive gains within a sustained vision. There’s a need for a strong local government response, and the good news is that there are resources available in this county to achieve these goals.”
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