Gabriel Ehrlich and Donald Grimes from the University of Michigan’s Research Seminar in Quantitative Economics (RSQE) recently shared their economic outlook for Washtenaw County. The presentation, sponsored by Ann Arbor SPARK, occurred during a Washtenaw Economic Club luncheon hosted by Washtenaw Community College on April 18, 2024. Melissa Sheldon, Ann Arbor SPARK’s director of research, moderated the event’s Q&A session and provided the following summary of the economic outlook.
Economic Outlook for Washtenaw County | 2024 – 2026
Washtenaw County is currently in a strong place as we head towards the middle of the decade, with the University of Michigan’s latest economic outlook offering an encouraging snapshot of our local economy. Here’s a comprehensive breakdown of the 2024-2026 Washtenaw County Economic Outlook, showing a robust economic environment fueled by education, government, and health sectors.
Robust Job Growth Outpacing the State
The county’s job market is thriving, with forecasts indicating that payroll jobs will grow by 3.7 percent above pre-pandemic levels by 2026. This growth outpaces the state average, highlighting Washtenaw’s unique economic resilience. The local government sector is set to expand twice as fast as it will at the state level, reflecting the strength of local higher education institutions such as the University of Michigan, Eastern Michigan University, and Washtenaw Community College. Additionally, private sectors like health and social services, along with accommodation and food services, are poised for notable expansion.
Quarterly Payroll Employment Indices, Michigan and Washtenaw County
RSQE: April 2024
Low Unemployment Rate Further Tightens Local Labor Market
Washtenaw County continues to showcase a low unemployment rate that is projected to decrease to 2.8 percent by the end of 2026. While this is a testament to the ongoing job creation and the vibrancy of the local labor market, it means there is no end in sight in our already tight labor market. Companies seeking qualified applicants possessing a bachelor’s degree or higher will need to be especially creative with filling open positions as the unemployment rate for this particular population is very low and labor force participation is high when compared to other populations.
Quarterly Unemployment Rate, Michigan and Washtenaw County
RSQE: April 2024
Wage Growth Challenges Amid Economic Gains
Despite many positive trends, Washtenaw faces challenges in wage growth, particularly for government sector workers. Real wages have experienced a decline over the past three years and are only expected to see modest improvements. This slow wage growth, especially compared to state levels, could pose challenges for maintaining economic momentum.
Average Annual Real Wage, Michigan and Washtenaw County
RSQE: April 2024
The Housing Crunch
A critical concern highlighted in the report is the lag in new housing construction. With job growth expected, the current rate of residential building is insufficient to meet demand, further inflating the already high housing costs in the area. Addressing this issue will be vital to sustaining the county’s growth and ensuring it remains an attractive place for residents and businesses alike.
Private Residential Building Permits in Washtenaw County
RSQE: April 2024
A Surge in Entrepreneurship
On an upbeat note, entrepreneurial activity in the county is on the rise. Increases in business applications and self-employment rates, especially post-pandemic, indicate a shift towards a more dynamic and innovative local economy. This heightened entrepreneurial spirit is a promising sign for the creation of new industries and job opportunities in Washtenaw.
Self-Employment in Michigan and Washtenaw County
RSQE: April 2024
Business Applications, Michigan and Washtenaw County
RSQE: April 2024
Looking Ahead
As we look towards the future, Washtenaw County is well-positioned for continued progress thanks to its robust economic foundations and the entrepreneurial drive of its residents. However, challenges such as wage stagnation and housing shortages remind us that there is still work to be done. At Ann Arbor SPARK, we remain committed to addressing these issues and supporting the region’s economic development to benefit all who live and work in Washtenaw County. Want to learn more or get involved? Attend an upcoming event or check out the 2023 Benchmarking Report to learn more about how Washtenaw County compares to some other U.S. tech centers.
