1. County Economic Forecast

Total employment in Kalamazoo County is projected to increase from 133,991 in 1990 to 159,883 in 2015, an increase of 19.4, (0.7 percent per year) as shown on Table III-8.These employment projections include wage and salary workers as well as the self-employed. The Kalamazoo Area Transportation Study had a slightly lower employment projection for the year 2015 based on the Michigan Regional Economic Models, Inc. (REMI) 2015 Socio-Economic Forecast for Kalamazoo County. The Woods & Poole Economics forecast in 1993 projected about 7 percent greater employment in the year 2015 than the Upjohn Institute; however, Woods & Poole forecasts are usually higher than other sources because part-time jobs are treated the same as full-time jobs and individuals with jobs inside as well as outside the home are reported as having separate jobs.

Table III-8 Existing and Projected Employment

Manufacturing employment is expected to decline from 29,761 to 23,614, a drop of 20.6 percent (-0.9 percent per year) referring to Table III-9. Table III-10 presents a more detailed breakdown of our employment forecast by two-digit SIC industry categories. Table III-11 presents projected industry earnings growth in billion of current dollars for the County's major industrial sectors. In 1995, we estimate that earnings per worker in manufacturing was $49,610 while earnings per worker in services was $34,620 and in retail trade, which is a major user of part-time workers, $14,070.

Table III-9. Employment Forecast Kalamazoo County

Table III-10 Detail Nonfarm Private Employment Kalamazoo County

Table III-11 Non-Farm Earnings (Billions Current Dollars) Kalamazoo County

On average, County wide earnings per worker is expected to increase at a 3.1 percent annual rate from 1995 to 2015, from $29,270 to $54,214. Since inflation is projected by most forecasters to increase an average 3.0 percent per year for the foreseeable future, our forecast calls for modest real earnings growth.

 Finally, Table III-12 presents the occupational forecast for Kalamazoo County. Following national trends, occupations in management, professional, and technical services are forecasted to experience the greatest growth. Retail and sales occupations are also expected to grow but at a slower rate. Automation is expected to cause employment growth in the clerical occupations to turn negative, while similar productivity improvements in manufacturing are expected to push the demand for operators and precision assemblers into negative territory, as well.

Table III-12 Occupational Forecast:  Kalamazoo County

These county wide forecasts are generated using the Upjohn Institute regional forecasting model for KalamazooCounty. The model was especially constructed for Kalamazoo County by Regional Economic Models Inc.(REMI) of Amherst, Massachusetts, and adjusted by the Upjohn Institute using available state and local economic data. The model has three components: an input-output matrix which captures inter-industry trade, a relative production cost model which estimates the economic impact of variations in wages and other business costs, and finally a forecasting model that is driven by the national forecast prepared by the U.S. Department of Labor. In this application we adjusted the County economic forecast by incorporating the population projections developed by the Michigan State Office of Management and Budget.

2. City Economic Forecast

As shown in Tables III-8 and III-13, employment in the City of Kalamazoo is forecasted to grow to 5.8 percent from 1995 to 2015, reaching nearly 73,000 workers in the final year of the forecast.Employment declines are expected in the City's manufacturing sector; however, these will be more than offset by gains in the City's nonmanufacturing sector. In the City's broad service sector, 9,700 new jobs are expected from 1995 to 2015. Table III-14 presents our projections of earnings by industry. Due to its industrial mix, e.g., the presence of Western Michigan University and the Pharmacia-Upjohn's research facility, the earnings of workers employed in the City are, on average, slightly more than the County average. We estimate that earnings per worker in the City was $29,435 compared to $29,271 County wide in 1995.

Table III-13 Employment Forecast: Kalamazoo City

The forecast of City's employment is based upon it's historical share of business activities in the County and on known future plant closings or downsizing including ABEX/NWL and Swift-Eckrich, Inc. It used both public information, e.g, the 1992 Economic Census published by the U.S. Department of Commerce, as well as, the most recent issues of the Harris Industrial Directories and the Greater Kalamazoo Chamber of Commerce Membership Directory.

For those interested in the future geographic distribution of employment, refer to Appendix B of Chapter II where the Kalamazoo Area Transportation Study retail and total employment by Travel Analysis Zone and aggregated by Census Tract are reported.

TABLE III-14Non-Farm Earnings(Billions of Current Dollars)Kalamazoo City

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