Michigan's economy is definitely on the upswing and the new year promises more of the same with the state's unemployment rate on a downward trajectory, auto sales on a tear and the happy surprise of below-$2-a-gallon gasoline putting extra cash in pockets and priming sales of highly profitable SUVs and light trucks.
To be sure, there are always unexpected obstacles to good economic growth, but the stars and dollar signs seem to be lining up for an upbeat 2015. State officials, analysts and corporate leaders interviewed by the Free Press point to positive growth and job creation for 2015. University of Michigan economists in their annual forecast predict nearly 60,000 new jobs for 2015 and another 73,000 in 2016.
The state added 39,000 new jobs from November 2013 to November 2014, and the state unemployment rate has fallen from 7.8% to 6.7% as of November 2014. J. Patrick Doyle, CEO of Ann Arbor Township-based Dominos Pizza, one of the nation's best performing stocks of the last several years, said pizza sales increase when more people have jobs. He said the state and nation should keep improving. "We're going to continue to grow.
Overall a lot of the foundational pieces are in place in the state," he said. "So I'm generally very optimistic about the state and about the country." Here are five key trends analysts and experts expect for the Michigan economy in 2015
■ Gas prices will power additional spending and jobs. With gas prices below $2 a gallon at some stations, consumer confidence is high, and that's great news for businesses. The Detroit Three automakers, whose product portfolios are still weighted more heavily toward highly profitable bigger vehicles, are expected to benefit as shoppers rush to the showroom. DETROIT FREE PRESS Gas prices nearing low, but big rise not expected Low oil prices aren't good for the smattering of oil drillers and natural gas companies in Michigan, but that sector of the state's economy is far smaller than in the major energy producing states in the U.S. "My gut tells me it's a positive for Michigan because it's leaving more disposable income in the hands of our citizenry," said Michael Finney, chief economic adviser to Gov. Rick Snyder.
■ Tourism will fuel job growth. Michigan's hospitality sector is surging. Hotels, resorts and tourist destinations, particularly in the northern part of the state, are flourishing. The leisure and hospitality sector is expected to add about 9,000 jobs in 2015, according to the U-M forecast.
■ Manufacturers won't add many jobs. The auto industry can handle most of the demand for new cars with the plants that it already has. Don't expect new assembly plants in Michigan or many new shifts. With U.S. auto sales potentially reaching the 17 million mark in 2015, auto factory employment may not get much higher in Michigan. The manufacturing sector is expected to add only about 6,000 jobs in 2015. By comparison, it added 77,000 manufacturing jobs from 2011-13.
■ Investors will seek out downtown Detroit. Economic development officials report renewed interest from prospective investors in downtown Detroit following the consensual resolution of the city's Chapter 9 bankruptcy. With a plan in place to overhaul city services and drastically reduce blight, Detroit has greater appeal to investors. But most of the investment will concentrate in the central business district, not reaching into the city's poor neighborhoods.
■ The temporary staffing sector will continue to grow. Taken together, temporary jobs and contract positions represented an estimated 36% of Michigan's job growth since 2009, according to federal figures. Employers are leaning heavily on temporary jobs to create flexible workforces, making it easier for them to shed jobs as the economy shifts. Watch for companies to add more temp jobs in 2015. Contact Nathan Bomey: 313-223-4743 or email@example.com. Follow him on Twitter @NathanBomey. Staff writer John Gallagher contributed.