U of M Economic Forecast shows Detroit’s economy more resilient, likely to avoid brunt of national recession

  • Local economy showing resilience amid projected challenges at national level 
  • Report says Detroit economy buoyed by demand for blue-collar jobs, risks remain 
  • Projections show employment and wages for Detroiters climb every year  
  • City-led efforts attract good-paying jobs, extend opportunity to more Detroiters 

Detroit’s economy will continue growing at a steady pace, showing resilience post pandemic despite projections of a mild national recession, according to the Detroit Economic Outlook for 2022-2027 released this week by the University of Michigan.  

“We expect Detroit’s resilience in recovering from the pandemic to date to translate into continued growth – even amid a challenging national economy,” said Gabriel Ehrlich, director of U-M's Research Seminar in Quantitative Economics and lead author of the forecast. 

Detroit economy lifted by demand for blue-collar jobs, risks remain 

Overall, projections show that employment will “climb every year from 2023 to 2027” ending the forecast “well above pre-pandemic levels adding 2,200 jobs this year before accelerating to an average 2,700 jobs per year through 2027. Last year, Detroit gained 8,000 jobs, with blue-collar jobs continuing to lead the way, exceeding pre-pandemic levels by 6,000 jobs. Continued growth in blue-collar jobs and recovery in the Leisure and Hospitality sector help offset recent losses and slower growth in the Financial Activities sector.  

While risks to the forecast remain, such as delays in construction projects and lasting effects from remote work, City-led efforts to provide good-paying jobs to Detroiters have built up resilience to withstand a downturn.  Further, the City is well prepared financially to withstand the revenue risks of a slowing economy because of strong fiscal management that has maintained balanced budgets and grown reserves, while improving the quality of life for Detroiters and meeting financial obligations to City retirees and employees. 

 City-led efforts attract good-paying jobs, extend opportunity to more Detroiters 

The City’s resilient economy is based largely on its ongoing success attracting good-paying jobs to Detroit.  In 2023, the city is expected to add another 1,200 jobs at the Amazon distribution center at the state fairgrounds and break ground on a new employment center at the site of the former AMC headquarters, which is expected to provide up to 400 new jobs. Lear’s new seating facility on the site of the former Cadillac Stamping Plant also is expected to reach full employment of at least 400 in 2023. 

Wages in Detroit are also projected to increase this year, according to the forecast report. Following a gain of 3.2% in 2022, wage gains are expected to reach 4.3% this year and return to 3% through the forecast. Wage growth is then expected to beat out inflation from 2024 and forward. The report also forecasts wage growth of Detroit residents to keep pace with wages at jobs located in the City over the forecast period. Average resident wages are expected to climb to $47,500 by 2027. 

Further, the U of M forecast “expects the city’s continued recovery over the coming years to draw workers back into the labor force.” As of February 6, there were 8,865 jobs available for those Detroiters looking for work. And if training is needed, the City will connect residents to training programs.  

Through programs like Jump Start, the City is ensuring more Detroiters will benefit from new jobs and wage growth. Jump Start is a major first-of-its-kind $100 million Scholarship program that’s designed to help long-term unemployed residents get reengaged in the job market through paid education and career/job training programs. Jump Start is expected to get 1,200 Detroiters back in the workforce with plans to reach more. 

“Despite projections of a mild national recession, the Detroit economy has proven to be more resilient today supported by multiple years of balanced budgets for the City post-bankruptcy. We will continue employing the administration’s growth and opportunity strategies to further sustain and grow the City’s economy and improve the quality of life for Detroiters,” said Jay Rising, Chief Financial Officer, City of Detroit. 

The forecast is prepared by the City of Detroit University Economic Analysis Partnership, which is a collaboration of economic researchers at the City, Wayne State University, Michigan State University, and the Research Seminar in Quantitative Economics (RSQE) at the University of Michigan. 

Detroit’s economic outlook will be discussed at its next Revenue Estimating Conference at 1:00 p.m. Monday, February 13 in the 13th Floor Erma L. Henderson Auditorium.  

The public is invited to attend in person or virtually at https://cityofdetroit.zoom.us/j/87228238067