Michigan to lose more than 100,000 jobs next year, say U-M forecasters

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Jaclyn Trop / The Detroit News

ANN ARBOR -- Michigan will lose even more jobs in 2009 than the 81,000-plus that have vanished already this year, and won't see an gains in hiring until sometime in 2011, according to a new economic forecast released today.

A total of 108,000 jobs will be lost next year in the state, according to a survey released today by economists at the University of Michigan's Research Seminar in Quantitative Economics. They predict state unemployment will exceed 10 percent in each of the next two years -- the highest rate since 1984. And while the economists expect some form of a government-approved rescue package for Detroit's Big Three automakers, they forecast that by 2010 the auto industry will employ less than a third of the workers it had a decade earlier.

The nationwide economic recession coupled with the precarious position of the Big Three automakers is a "troublesome gateway to the year ahead," according to U-M economist George Fulton.

"The potential consequences of myriad alternatives are impossible to predict at this point, but none of them is any good fro Michigan," Fulton said. "The hard times are here to stay."
The first half of 2009 will be especially rough for the already suffering auto, construction and retail sectors. Fulton and colleague Joan Crary forecast that the state will lose 53,000 manufacturing jobs next year and another 24,000 in 2010, with about two-thirds coming from the auto industry. Michigan already has lost 74,000 manufacturing jobs during the past two years.

After enduring an eight-year stretch of job losses tracing back to mid-2000, the state economy now faces the confluence of a U.S. economy in recession and the very real fear of bankruptcy among major players in its core industry: domestic automobile manufactures, Fulton added.
Fulton and Crary made the presentation during a two-day economic outlook session attended by more than 200 academics and analysts.

They said, though, that a surprising number of small, non-auto-related businesses continued to grow. They include agriculture and chemical and medical businesses. In fact, education and health services -- the only industry sector expected to see employment gains -- will gain 22,000 jobs during the next years, they said.

Although the economists said they expect 2010 will be "much better" than 2009, modest job gains aren't expected across the board in the state until sometime in 2011.