Oakland County faces ‘complicated’ economic future, has good fundamental metrics

OAKLAND COUNTY — Oakland County’s economic future is “complicated” as Michigan’s economy slows, and national and global policies coming from Washington, D.C., are currently very fluid, according to economist Gabriel Ehrlich, of the University of Michigan.

Ehrlich co-authored the county’s 2025 economic outlook report with fellow University of Michigan economist Donald Grimes.

“The message in this year’s report is … it’s complicated because Michigan’s economy has been slowing down recently,” said Ehrlich. “And that’s at the same time as we’re now facing new challenges with an uncertain policy environment going forward.”

Nationwide, Gross domestic product growth is expected to slow down this year, dropping from 2.8% in 2024 to 1.4%, according to the economists.

“This is given we do expect higher tariffs and a lot of economic uncertainty going forward,” he said.

He said they expect GDP to slowly go back up over the next couple of years. He said they anticipate it to go to 1.6% in 2026 and 2.2% in 2027.

“You know the tariffs have been getting all of the attention lately, but there are other things going on in the economy that should boost growth,” Ehrlich said.

Ehrlich emphasized that they are not forecasting a recession in the U.S. at the moment.  They are relatively optimistic about the U.S. economy because they expect the Federal Reserve to continue to cut interest rates at a moderate pace, and large tax cuts are on the horizon that should provide a short-run stimulus to the economy.

It is expected that, as a result of tariffs, there will be a sharp decline in light vehicle sales. The sales pace is expected to bottom out at just under 50 million units during the third quarter of this year before a modest recovery begins.

Payroll employment in Oakland County declined by 0.1% last year. There were job losses in manufacturing, professional and technical services, and administrative support services.

However, he said they are forecasting that the county will have a job growth of 0.5% per year over the next three years.

“The blue-collar industries have been leading the way in Oakland County’s recovery from the pandemic. Job gains are expected to be modest this year, as tariffs weigh on these industries, but growth then picks up in 2026, 2027, bringing blue-collar employment to nearly 6% above its pre-pandemic level,” Ehrlich said.

He said that growth is coming from outside the auto sector, which is losing a small number of jobs from 2023 to 2027.

Higher education service industries they expect to grow to their pre-pandemic level by the middle of next year, with private health and social service jobs accounting for 70% of those job gains.

Jobs that don’t require a degree will remain nearly 8% below their pre-pandemic level by the end of the forecast period, they project.

“This reinforces the importance of education in building Oakland County’s economy going forward,” he said.

They forecast that real wages, which increased by 1% last year, will continue to grow by 0.5% per year through 2027.

“That may not sound like a lot, but with real wages, that’s what we want to see: moderate, but steady growth,” he said.

“We’re forecasting ongoing wage growth, you know, growth in the real living standards over the next couple of years, despite a period of very uncertain economic policy,” Ehrlich said.

All counties in Michigan had a higher unemployment rate at the start of this year than they did at the start of 2024. The state’s unemployment rate rose from 4% at the start of 2024 to 5.5% in April 2025. Every county in Michigan had a higher unemployment rate this year. Oakland County’s unemployment rate rose from 3.1% at the beginning of 2024 to 4.2% as of March 2025, according Ehrlich.

“That was a significantly smaller increase than most of Michigan,” he said. “In fact, Oakland’s unemployment increase was tied for the fourth smallest out of 83 counties in the state. So, you know, not immune from the statewide trend but doing better relatively than most of Michigan.”

Ehrlich said he believes the key reason Oakland County has fared well is that it has solid fundamentals.

He said that they rank Oakland County against its peer counties throughout the country annually based on educational attainment, child poverty, median family income, the share of high-income senior citizens, and the share of professional and managerial occupations. This year, Oakland County was ranked 11th overall out of 27 counties. He said it ranked in the top 10 as far as low poverty rate, high educational attainment, and a high share of professional and managerial occupations.

“So those fundamental metrics that we always look at every year, they are holding up well in Oakland County, and that is part of why we believe that the county has been relatively resilient in the face of a little bit of an economic wobble here in Michigan recently,” he said.

This year, Oakland County looked at the state of its small businesses. Small businesses are those with 49 or fewer employees. The economists found that Oakland County is home to nearly 25,000 small businesses and about 3,600 large businesses. This means that small businesses account for nearly 7 of every 8 businesses in Oakland County.

“Something that we found that really was cool to see and that I had not known is that small businesses in Oakland County tend to pay significantly higher wages than those in Oakland County’s peer group,” said Ehrlich.

According to Ehrlich, small businesses in Oakland County on average pay almost $5,700 per year more, or about 12% higher than the average in one of its peer counties. Oakland County ranks fourth for average wage in small businesses.

Oakland County saw a population increase over the last year.

“The reality is Oakland County is better off today than it was 10 years ago, and so I’m really excited to hear about the future,” said Peter Provenzano, chancellor of Oakland Community College.

Oakland County Executive David Coulter said that he firmly believes that uncertain times call for innovation and investment. He said the county is doing this with organizations such as Oakland Thrive and Main Street Oakland County.

“This report is maybe not as rosy as some have been in the past, and Oakland County isn’t immune to the effects of the national and global economy, or what I would call the uncertainty being driven by the seesawing policy decisions, issues like taxes and tariffs, coming from Washington, D.C. We can’t immune ourselves from them,” Coulter said. “But despite these headwinds, which communities across Michigan are facing and I would say the country … you don’t back away or shy down or cower, but you invest and you innovate and that is how we will meet the current moment as well.”

“We continue to think there’s a path to growth for Oakland County’s economy over the next few years despite the speed bumps that may be coming from national economic policy,” Ehrilch said. “The reasons are the ones we traditionally highlight. They’re Oakland County’s investments in its people, its communities and its businesses. Oakland County’s high quality of life and well-educated workforce should provide resilience in the face of the day’s economic uncertainty.”