Today, the City of Detroit in partnership with the University of Michigan released its first forecast for Detroit, which showed ongoing gains in household income, employment and labor force participation through 2024. The forecast reports a 1.7% growth rate in employment for 2019, exceeding the 1.0% growth rate of household employment in Michigan overall in that time.
University of Michigan economist Donald Grimes said that labor force participation is expected to rise from 47.3% to 48.5% between 2018 and 2024 as new job opportunities are created from developments such as the FCA Mack Avenue plant and Gordie Howe
“Bringing new jobs to Detroit and filling them with Detroiters has been a cornerstone of the Mayor’s economic development strategy,” said David Massaron, Chief Financial Officer for the City of Detroit. “This independent forecast validates that strategy as we work to ensure Detroiters have opportunities for good jobs.”
According to the forecast, the city's unemployment rate will continue to fall from 18.7% in July 2013, when the City filed for bankruptcy, to 8.6% in 2019, and to 7.9% by 2023 and 2024, improving faster than the statewide measure.
The forecast was produced by economists at the University of Michigan's Research Seminar in Quantitative Economics, who are part of the partnership with the City of Detroit and economists at Michigan State and Wayne State universities.
While the economic forecast supports positive trends for the City’s income tax revenue, many of the City’s major revenue streams, including property tax and state revenue
sharing, will have constrained growth due to state laws.
"We expect Detroit's ongoing recovery to form a key component of Michigan's economic growth through 2024," said Gabriel Ehrlich, director of RSQE.
"This difference in untapped labor should allow the city to benefit more than the state as
labor markets continue to tighten," said U-M economist Aditi Thapar.
By developing Detroit-specific data, the city government and community stakeholders can quantify local economic conditions and to plan, design, finance and evaluate programs to improve economic opportunities for Detroiters.
"Detroit has vastly improved its financial position and prepared for any future financial hiccups by doubling its rainy day fund," said U-M economist Daniil Manaenkov.
"Despite that progress, Detroit's economy continues to face well-known challenges, including an elevated poverty rate and relatively low educational attainment among its residents."
Among the forecast highlights:
Most of the public economic data used in the first Detroit forecast is only available at the county or regional level. The city’s Office of the Chief Financial Officer and its University Economic Analysis Partnership are working with the State of Michigan’s Bureau of Labor Market Information and Strategic Initiatives to produce detailed payroll employment and wage estimates for the city of Detroit. This effort will provide new insights into the local economy not previously available for use in future forecasts.