Experts relay 2016 economic forecast for Macomb County

By: Nick Mordowanec | Fraser - Clinton Township Chronicle | Published January 18, 2016

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MACOMB COUNTY — Nearly a decade after the national recession, Michigan — and the United States as a whole — still has a lot of work to do.

That was the message put forth by local business experts at the Jan. 15 economic forecast at Andiamo in Warren.

Several local and regional dignitaries attended the event.

The first of two speakers was David Sowerby, financial analyst of Bloomfield Hills-based Loomis, Sayles and Co. LP, and the brother of Clinton Township Treasurer Bill Sowerby.

Sowerby said he would give the state of Michigan a “D” grade in terms of cyclical ability, adding that the state is showing progress comparable to the “good times” of the early to mid-1990s.

He acknowledged a formula of job growth and income growth as being a sign of true prosperity, saying, “You make your most money when you run against the herd.” Michigan stocks are outperforming those on the national level, while the state also holds a better totality of job and income growth.

Michigan has made great strides, he said, but there’s still room for improvement in publicly traded companies and per capita income. The state is currently ranked No. 35 in per capita. Michigan was 17 in 2005. 

“These are some of the best opportunities I’ve seen for Michigan in more than 20 years,” Sowerby said.

Dr. Jim Jacobs, president of Macomb Community College, then took the floor.

Jacobs used PowerPoint slides to illustrate his points, often focusing on the auto industry’s impact on Macomb County. Even though he said the county is performing better than the state is as a whole, he was less optimistic than Sowerby.

“If this is the best we can do, I think we have some issues emerging,” Jacobs said.

He highlighted three major points why the county is better positioned than the state: the domestic growth and reestablishment of the auto industry is concentrated there; major community institutions — such as county and local governments, schools and hospitals — are stable, debt-free and offer long-term viability; and population growth is attracting new and younger families.

Macomb County is one of three counties in the state to grow in population, he said, and is second only to Oakland County.

“The generation of new with young children is an important feature of economic growth,” he said.

Growth comes in different areas. Increases in the private sector, coupled with the continued success of the auto industry, leads to growth in other areas — such as marinas in Lake St. Clair and people spending their money at malls like Lakeside and Partridge Creek.

But the 2008 recession still lingers over everybody, predicated by lost revenue and rising property costs. The housing market is rising when compared to 2008, but the growth isn’t as extreme as it could be.

Jacobs discussed a civic ecosystem that works to support the county in various aspects, including: K-12 students predominantly learning in public education atmospheres, including immigrants who speak more than 100 languages around the county; a regional transportation authority that could impact areas like Gratiot Avenue and Hall Road by retaining families, helping employees get to work and seamlessly integrating everyone into the “regional matrix”; and the impact of health care, as the rate of uninsured individuals dropped from 12 percent to 7 percent — or 50,000 residents that are not insured.

“Hospitals can take on wellness as their principal feature,” Jacobs said.

The county’s continued emergence coincides with residential and business growth, while the challenge exists to increase growth and opportunities for individuals while also diversifying the economic base through methods like civic infrastructure and private sector investment.

For example, the Michigan Defense Center is located within Macomb County and is responsible for about 40 percent of business — notably through entities like TACOM and TARDEC.

Mass transit is integral to regional connectivity, he said, and the “Blue Economy” initiative is important not just for locals, but also for those from outside of the area.

“Individuals can utilize the waterfront, not just for our own residents but also as a tourist attraction,” Jacobs said.

Low energy and gas prices combined with growing employment provide hope for more consumer demand in 2016, but there are still many “what if” scenarios that remain unclear.

Record auto sales are depended upon to keep increasing, but contraction may eventually occur. Other issues at the national level include future interest rates, manufacturing competition, and inflation due to wage increases.

There are additional factors to consider as well, such as the Chinese economy, Michigan’s urban crisis and the 2016 presidential election.

Jacobs said local challenges exist in achieving employment growth that have nothing to do with the auto industry, as well as proper collaboration between the county and its residents, and the federal government and the county.

The Great Lakes Water Authority, schools, public transportation and downtown development are at the forefront of things to watch moving forward.

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