Economic Forecast for Macomb CountyJanuary 15, 2016

James Jacobs, Ph.D.President

Macomb Community College

PRESENTATION OVERVIEW

• Macomb County economic trends

• Forecast

• Wildcards

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M I C H I G A N : M O V I N G U P W A R D ?

STATE ECONOMIC CONTEXT

• Record sales growth of the auto industry fuels the Michigan recovery

• Significant problems remain in state spending on infrastructure, education and long-term urban issues

• Foregone state revenue from the previous tax cuts hampers any prospects for dealing with these challenges with no political consensus to tackle them

If this is the best economic times in Michigan what happens when auto sales decline?

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MOTOR VEHICLE & PARTS MANUFACTURING EMPLOYMENT2005 – 2014; OCTOBER 2015*

226,300 171,700

89,10075,300

124,30094,000

925,700791,800

0100,000200,000300,000400,000500,000600,000700,000800,000900,0001,000,000

050,000

100,000150,000200,000250,000300,000350,000400,000

U.S

.

Stat

e Le

vel

Michigan Indiana Ohio U.S.

*U.S. employment data currently from September; can trail state data by one month depending on timing of update

Source: Center for Automotive Research

2 0 1 5 R I D I N G T H E T I G E R

MACOMB COUNTY BETTER POSITIONED THAN STATE ECONOMY

• Domestic automaker recovery concentrated in Macomb County

• Continued population growth attracts young families and provides long-term growth

• Major community institutions (county and local government, schools, and hospitals)are stable, debt-free and have long-term viability

• Policy focus on middle class fundamentals makes a difference

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Source: MDCD/Employment Service Agency

MACOMB COUNTYPRIVATE SECTOR TRENDS 2000-2015

(1ST QUARTER – SELECTED SECTORS)

Industry 2000 2010 2014 2015

Construction 17,937 8,695 11,129 12,642

Manufacturing 106,415 51,526 68,656 62,006

Wholesale Trade 11,212 9,292 10,799 11,185

Retail Trade 42,933 36,295 39,409 40,484

Professional & Technical Workers

1,698 2,129 13,907 25,519

Administrative Support 21,194 16,075 18,531 19,393

Education Services

1,349 2,521 2,332 2,348

Healthcare & Social Assistance 25,509 23,345 27,129 38,484

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-30,000-20,000-10,000

010,00020,00030,00040,00050,00060,00070,00080,000

Construction Manufacturing AdministrativeSupport

Health Care

20082009201020112012201320142015

EMPLOYMENT IN MACOMB COUNTY SELECTED SECTORS

17,937 12,642

106,415 62,006

21,194

‐19,393

25,50938,484

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MACOMB COUNTYEXPANSION AND ATTRACTIONS

2011 2012 2013 2014 2015

Projects 29 42 35 38 21

Jobs Retained 2,535 3,450 1,626 1,659 4,377

Jobs Created 981 1,260 696 1,378 1,132

Net Investment (Millions)

$105.6 $164.3 $90.6 $200.5 $163.4

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MACOMB COUNTY BRIGHT SPOTS IN 2015

• Over $2 billion dollars of planned auto investments in the county indicate long-term commitment of the industry to local economy

• Development of the smart car and convergence technology in auto continues to make Macomb County one of the local hubs for innovation in cybersecurity

• Diversification of local economy continues with new emphasis on information technology, health care and recreational activities

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MACOMB COUNTY RESIDENTIAL SALES(3RD QUARTER COMPARISON)

Year# of

Homes Sold

Private

% of Homes

Sold Private

Average Sale Price

Private

# Homes Sold By

Bank

% of Homes Sold By

Bank

Average Sale Price By Bank

2008 1,011 46% $162,245 935 43% $91,811

2010 1,063 51% $110,276 795 38% $64,480

2012 1,791 63% $118,508 840 29% $61,860

2015 2,444 92% $164,193 226 8% $90,850

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County 2009 2010 2011 2012 2013 2014 2015*

Macomb 346 933 1,145 1,342 1,865 1,814 1,751

Oakland 418 874 1,262 1,971 2,876 2,421 2,176

Wayne(Excluding

Detroit)286 418 467 694 865 851 1,021

RESIDENTIAL BUILDING PERMITS 2009-2015TOTAL PERMITS ISSUED (SINGLE FAMILY, APARTMENTS,

CONDOMINIUMS)

Source: SEMCOG

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*Preliminary Numbers

Community Assessed % Change

Armada Twp. 9.72%Bruce Twp. 8.44%Center Line 10.96%Chesterfield Twp. 10.64%Clinton Twp. 9.43%Eastpointe 11.61%Fraser 10.72%Grosse Pointe Shores 12.49%Harrison Twp. 7.69%Lenox Twp. 13.48%Macomb 7.85%Memphis 7.41%

Community Assessed % Change

Mount Clemens 13.48%New Baltimore 8.41%Ray Twp. 8.86%Richmond 9.87%Richmond Twp. 9.58%Roseville 10.94%Shelby Twp. 9.84%St. Clair Shores 11.86%Sterling Heights 9.79%Utica 12.79%Warren 11.09%Washington Twp. 7.99%

2016 PROJECTED TAX ASSESSMENTS

Source: Macomb County Equalization Department J A M E S J A C O B S , J A N U A R Y 2 0 1 6

2008 2010 2012 2015

Case LoadDepartment of Human

Services2,929 4,026 3,547 1,515

Welfare to Work5,587$8.64

5,686$8.53

6,290$8.64

3,153$9.12

Michigan Works: Clients Served 77,158 98,006 55,369 35,640

EVIDENCE OF ECONOMIC RECOVERY FOR MACOMB COUNTY

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VIBRANT CIVIC ECOSYSTEM SUPPORTS ECONOMIC GROWTH

• Macomb County public educational institutions remain strong and focused on diversity

• County participation in the Regional Transportation Authority is an important priority for all residents

• Health care institutions making the transition from acute care to a strategy for wellness

• County embraces the blue economy with major activities along the Clinton River and Lake St. Clair

• Concentration on “no frills” development pays off for middle class residents

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IMPACT OF EDUCATION

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• Numbers of immigrants in school districts increases and schools take on teaching to diverse landscapes - over 100 languages spoke in the county

• Strong emphasis on post-secondary education as career advancement

IMPACT OF REGIONAL TRANSPORTATION AUTHORITY

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• Continued efforts to enhance and build public transportation can have dramatic effects on retaining young families

• Great effort must be made to ensure Macomb County lines tie seamlessly into the overall regional matrix to realize the benefits

IMPACT OF HEALTH CARE

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• Growth of insured residents to over 50,000 - rate of uninsured drops from 12% to 7% of the population

• Long-term forecasts see less use of emergency rooms and more integration of health care into an overall wellness strategy – this will save money and resources

MACOMB COUNTY EMPLOYMENT GAINS

November

2010

November

2015

Percent Change

2010 - 2015Labor Force 401,918 415,932 3.5%

Employed 352,243 394,683 12%

Unemployed 49,675 21,249 -57.2%

Percent Unemployed

12.4% 5.1%

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Year Michigan Macomb County

2005 Age 55-64

65.2%(57.6%)

65.9%(60.3%)

2010 Age 55-64

62.2%58.2%

65.1%(50.8%)

2014 Age 55-64

61%(55.7%)

63.3%(59.3%)

LABOR FORCE PARTICIPATION

Source: Macomb Department of Community Services

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7,0767,573

8,531

9,545

10,73911,516

12,342 12,503

01,0002,0003,0004,0005,0006,0007,0008,0009,000

10,00011,00012,00013,00014,000

December2007

December2008

December2009

December2010

December2011

December2012

December2013

December2014

MACOMB COUNTY SSI RECIPIENTS AGE 18-64

AreaChange in Median Household Income

1999 2014 $ Change % Change

Macomb $71,797 $54,059 ‐$17,738 ‐24.7%

Oakland $85,308 $66,436 ‐$18,872 ‐22.1%

Wayne $56,190 $41,421 ‐$14,769 ‐26.3%

Michigan $61,551 $49,087 ‐$12,464 ‐20.2%

United States $57,868 $53,482 -$4,386 -7.6%Source: U.S. Census 2000 and American Community Survey 2014

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MEDIAN HOUSEHOLD INCOME BY GEOGRAPHIC AREA

2011 2012 2013 2014 2015

Households Served 54,023 58,890 66,661 62,571 66,281

Individuals Served 152,522 187,040 172,788 160,922 156,586

Pounds of Food Distributed

1,892,608 2,255,631 1,558,452 1,463,576 1,501,915

MACOMB FOOD PROGRAM

EMERGENCY FOOD DISTRIBUTION

Source: Macomb Department of Community Services

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THE EMERGING MACOMB COUNTY • Stable, continued growth in 2015 builds a positive image of the

county

• Within the metropolitan area Macomb County emerges as a more attractive place of investment and residential growth

• The challenge is how the county handles three major areas:• Increasing opportunities and growth for new residents • Continuing to diversify and expand the economic base within

a regional strategy• Expanding the civic infrastructure that complements and

supports private sector investment

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IMPORTANT INITIATIVES

• Regional Transit Authority

• Blue economy efforts

All county issues should focus on collaboration and effective use of resources

• Protect & Grow – Michigan Defense Center

CHALLENGES AHEAD

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• Little chance of auto sustaining much more employment growth -where will the new jobs come from in the area?

• How does the county advance together - collaboration across units to benefit everyone?

• What should be the role of the federal government to promote and help a county with growth?

• What is the current relationship between Macomb County and the needs of Detroit:• Water authority• Schools• Transportation• Downtown development

F O R E C A S T

RECOVERY CONTINUES IN 2016 AT THE NATIONAL LEVEL

• Low energy prices and growing employment fuels consumer demand and growth for one more year

• By the end of 2016 manufacturing in general and auto specifically will face major challenges which may result in significant contraction

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EMERGING ISSUES IN 2016

• Future interest rate hikes by Fed impact this downturn

• Manufacturing will face challenges with the strong dollar encouraging international competition

• Wage rate increases to drive some greater inflation

• Macomb institutions and policy makers will be faced with issues before 2017 to prepare for the constriction

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WILDCARDS

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• Impact of China’s meltdown

• Strength of US domestic auto market

• Federal policy toward metropolitan areas

• Presidential election

• Michigan’s urban crisis

• Center for Automotive Research

• Charter Township of Clinton

• City of Sterling Heights

• City of Warren

• Data Driven Detroit

• First State Bank Eastpointe

• Henry Ford Macomb Hospitals

• Lakeside Shopping Mall

• Macomb Community College

• Macomb County Board of Commissioners

• Macomb County Chamber of Commerce

• Macomb County Community Services

• Macomb County Department of Health & Human Services

• Macomb County Equalization Department

• Macomb County Executive’s Office

• Macomb Intermediate School District

• Macomb County Planning & Economic Development

• Macomb/St. Clair Works

• Michigan Defense Center

• Michigan Department of Community Health

• Michigan Department of Licensing & Regulatory Affairs

• Michigan Department of Treasury

• MiRealSource

• The Mall at Partridge Creek

• Regional Transportation Authority

• Selfridge Air National Guard Base

• Southeast Michigan Council of Governments

• United States Census Bureau

• Utica Community Schools

• Warren Consolidated Schools

ACKNOWLEDGEMENTS

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FOR A COPY OF THE PRESENTATION EMAIL: president@macomb.edu