Industrial employment sectors have experienced substantial employment expansion over the last year, recording an annualized net gain of 32,200 jobs across the metro.
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JLL Detroit Industrial Employment Update: July 2015
1. Industrial real estate implications
Job growth/loss by sector (12-month change)
Detroit
Absorption has been positive for the past two years, pulling vacancies down to
within 2008 levels. The market has also been seeing fewer large move-outs
lately, allowing the recovery to play out as the auto industry ramps up
production and drives growth in the local economy. Major tenants continue to
make leasing decisions in the 100,000- to 250,000-square-foot range and the
prospects for net absorption, at least in the next couple of quarters, remain
solid.
Demand growth will continue to favor large, modern product, and when met
with fewer move-outs, the result will be a continued firming of market
fundamentals. With a minimal supply pipeline, marginal improvements in
demand will result in a tightening of vacancies. Much of the metro’s supply has
fallen into obsolescence, making demolitions seem like a good option for
improving fundamentals.
Total jobs vs. unemployment rate
Detroit
Industrial employment trends (12-month change)
Detroit
Industrial employment update
Metro Detroit . July 2015
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
2000 2002 2004 2006 2008 2010 2012 2014
Peak: 2,217,186 jobs
unemployment rate
total jobs
3.0%
• According to the most recent estimates from the BLS, total non-farm
employment in Detroit increased to ~2.0 million payrolls, representing an
annualized increase of 51,100 jobs or 2.7 percent. Meanwhile,
unemployment decreased 2.0 percentage points year-over-year to 6.6
percent.
• Industrial employment sectors have experienced substantial employment
expansion over the last year, recording an annualized net gain of 32,200
jobs across the metro. Employment gains were led by the manufacturing
sector, which added 14,200 jobs year-over-year.
• Total U.S. nonfarm employment increased by 223,000 jobs in June and
downward revisions were made to previous months totaling 60,000 jobs.
Other indicators, showing wages growing slowly and jobless Americans
remaining on the sidelines, painted a grayer picture.
• Despite the 20 basis point drop in the unemployment rate, from 5.5
percent in May to 5.3 percent June, average hourly earnings stayed flat.
What had been a 2.3 percent annual growth rate in hourly earnings in
May fell to 2 percent in June, disappointing hopes that wages were finally
increasing for many workers.
5.3%U.S. unemployment
2.1%U.S. 12-month job growth
6.6%Detroit unemployment
2.7%Detroit 12-month job growth
5.5%Michigan unemployment
2.6%Michigan 12-month job growth
-2,100
-100
500
2,400
3,200
5,800
7,600
9,700
9,900
14,200
-3,500 1,500 6,500 11,500 16,500
Government
Other Services
Information
Leisure & Hospitality
Financial Activities
Educational & Health Services
Trade, Transportation & Utilities
Professional & Business Services
Mining, Logging & Construction
Manufacturing
Number of Jobs
-10.0
0.0
10.0
20.0
30.0
40.0
2011
2012
2013
2014
2015
Mining, Logging & Construction Trade,Transportation & Utilities Manufacturing Other Services