The third quarter of 2008 rocked the country and Washtenaw County, with huge economic declines followed by some of the worst unemployment rates in history.

However, George Fulton, director of the University’s Research Seminar in Quantitative Economics, and Donald Grimes, senior research associate at the University’s Institute for Research on Labor, Employment, and the Economy, predict a road to recovery for Washtenaw County that starts for some industries in 2010 but will not begin to be felt by others until 2012.

Last week, Fulton and Grimes released a 40-page report called the Economic Outlook for Washtenaw County in 2010 to 2012. The two University researchers have created this economic outlook for the county each year for the last 25 years. But amid the state’s and country’s current economic climate, this year’s report was much anticipated.

Grimes said the report evaluates the changing economy and provides information on what industries will best recover from the current recession. Based on this year’s findings, Grimes said Washtenaw County has a hopeful economic future.

“It’s good news in the sense that the county’s economy is beginning to grow again in terms of jobs,” Grimes said. “We think it started growing in the first quarter of this year and will continue to grow at a pretty good pace, not a great pace, but it’ll be picking up pace in the second half of 2011 and then into 2012 it’ll be pretty healthy.”

Washtenaw County’s economic decline started in the early 2000s, because at that time the county started experiencing significant job losses. The pattern reflected the sufficient job losses from Michigan’s automotive industry.

According to the report, ebbs in the health of the auto industry play a large role in the county’s economic position. Automotive jobs made up 11.1 percent of the county’s employment in 1990, but by 2012, they are expected to represent only 1.8 percent of county jobs.

In 1999, the county’s unemployment rate was 1.6 percent and has consistently risen every year since. In Grimes and Fulton’s economic evaluation of last year, they under predicted the employment rate for 2009 and said unemployment was going to rise from 5.9 percent to 8.2 percent. Instead, it reached 8.8 percent.

Though the current national unemployment rate stands at 9.7 percent, the report projects that it will decline to 9.5 percent for 2010. According to the report, rates are expected to reach 9.1 percent in 2011 and 8.7 percent by 2012.

While Grimes and Fulton say the county is rebounding from the recession, by the end of 2012, the researchers predict the county will still have fewer jobs than it had at the end of 2008.

“It’s going to be sort of a slow turnaround, but hiring will be turning around in the next few months both nationally and locally,” Grimes said. “It’ll build up speed a little bit, and then there might be a bit of a pause at the end of 2010, beginning of 2011, but by the middle of the year we think things will be recovering in terms of hiring.”

According to the report, Washtenaw County’s unemployment rate has been consistently lower than both the state and national averages. In 2009, Michigan had an average unemployment rate of 13.6 percent, while the nation had an average rate of 9.3 percent.

In 2009, Washtenaw County lost 5,858 jobs, and for the first time since 2002, the county had fewer job losses compared to the nation. However, the Economic Outlook predicts that only 66 jobs are expected to be lost in the county in 2010. By the second half of 2011, Fulton and Grimes predict a job growth of 1.1 percent.

Fulton and Grimes said the local economy often reflects the national economy. The changes seen in Washtenaw County are part of a nationwide trend — meaning that by 2012, many aspects of the national and county economies will rebound and even grow at steady paces over the next few years.

Despite the economic rebound, not all industries will see a rise in their businesses. The construction industry, retail stores and restaurants are expected to continue to struggle economically.

“Things that are really much more discretionary, consumer spending … it’ll be a tough job market for people to find jobs in that area,” Grimes said.

In the report, Grimes and Fulton under predicted the losses in trade, transportation, utilities, business and professional industries in Washtenaw County for 2009. While retail was once seen as a potentially booming economic industry, it is expected to improve but not hold the economic stature that was once assumed it would.

On the other hand, private education and health care have helped the county’s economy by consistently adding jobs. Higher education jobs also will be in greater demand and will rebound, according to the report.

“The strongest part of the economy is going to be the knowledge economy. We believe that is where the sustained job growth will occur,” Grimes said. “Those are jobs that are basically built by people with bachelor’s degrees.”

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