Ann Arbor — Oakland County's economy has downshifted with rising unemployment and trade challenges, but there is hope for a gradual job recovery through 2027, according to University of Michigan researchers.

Last year presented challenges for Michigan's economy, with every county starting 2025 with a higher unemployment rate than at the beginning of 2024. Oakland County was affected by this trend, though the increase in its unemployment rate was the fourth smallest among Michigan's 83 counties.

In its annual forecast of the Oakland County economy, the U-M Research Seminar in Quantitative Economics predicts that job growth in Oakland County will rebound at a moderate pace in 2025, averaging 0.5% annually through 2027. The projected growth would bring the county's average real wage to $77,300 by 2027, about $8,000 higher than the statewide average.

Although job growth is forecast to be slower than the 2% annual growth experienced from 2010 to 2019, the county's strong fundamentals, such as a diverse job market and educational attainment, offer resilience, the U-M economists say.

"We expect job growth to remain subdued and uneven over the forecast horizon, with federal policy risks casting a long shadow," said RSQE Director Gabriel Ehrlich, who co-authored the forecast with Jacob Burton, Donald Grimes and Michael McWilliams.

Key sectors expected to see varied performance:

• The construction and private health and social services sectors are anticipated to continue providing strength. While construction added 3,200 jobs over the past two years, growth is expected to slow but is still projected to be 23% higher by 2027 than its 2019 level. The combined job gains for the construction and private health and social services sectors from 2025 to 2027 are projected to total 5,500 jobs.
•  Finance and insurance are projected to settle into steady growth after increasing by 1,800 jobs in 2024. The industry is expected to be 14% higher in 2027 than its 2019 level.
•  Manufacturing has struggled recently, with an expected small employment decline in 2025 before gaining back some jobs in 2026 and 2027. Motor vehicle and parts manufacturing lost jobs in 2024 and is estimated to lose more in 2025, with some recovery expected over the next two years due to the reopening of GM's Orion Assembly plant.
•  The recent decline in professional, scientific and technical services is concerning, with 5,900 jobs lost in 2023 and 2024 combined. Another 900 job losses are expected this year before the sector stabilizes in the next two years.
•  Administrative and support and waste management services are forecast to lose 1,500 jobs over the next three years.
•  Retail trade employment is expected to continue to decline in the next three years, losing an average of 200 jobs per year.
•  Accommodations and food services are projected to see job growth return in 2025 by adding an average of 790 jobs annually through 2027.

Although Oakland County faces a more complex and uncertain economic environment compared to a year ago—like that in both the state and country as a whole—the U-M forecast remains cautiously optimistic, acknowledging that the road to full recovery will likely feature some twists.

"We believe that Oakland's long-run fundamentals remain strong," Ehrlich said. "Its well-educated labor force, high concentration of professional jobs and low poverty rate provide resilience in the face of uncertainty."

In the long run, Oakland's strong fundamentals are expected to prevail over short-term challenges, allowing it to remain one of the most prosperous local economies in the country, they say. The direction of federal economic policy, particularly related to tariffs and international trade, poses significant short-term challenges.

Forecast: The Oakland County Economic Outlook for 2025-2027

Contact: Juan Ochoa, ochoajm@umich.edu