Detroit Free Press
Feb. 8, 2023
The head of the Detroit Regional Chamber said he believes metro Detroit will avoid a recession this year thanks to slowing inflation, low unemployment and a still-high number of job postings.
CEO Sandy Baruah offered that upbeat assessment during a media briefing this week for the Wednesday release of the chamber’s annual State of the Region report.
“I personally don’t think we are going to be in an actual recession in 2023,” said Baruah, who has led the chamber since 2010.
“We going to see slower growth than we did in 2022 — absolutely. But I still think we’re going to grow,” he said. “And I think the threat of recession is really overblown, particularly when we look at how companies feel about how they are doing themselves, when you look at the labor market, when you look at inflation actually trending downward.”
“So I feel pretty good that we are going to have a solid — not a banner year — but a nice solid year in 2023,” Baruah added.
The chamber’s report shows that despite recent high-profile layoffs at a few companies, there are still enough jobs available in metro Detroit for nearly anyone who wants to work.
The unemployment rate in the regional, which is home to 5.46 million people, has been holding steady at about 3% since mid-2022.
In the city of Detroit, the unemployment rate fell below 7% late last year for the first time since 2000, prompting Detroit Mayor Mike Duggan to last month declare that “for the first time in my lifetime, we have a job available for every Detroiter who wants one.”
The chamber’s report shows job postings in the region were just under 200,000 late last year, after peaking at nearly 238,000 postings last March. The top postings by occupation were:
- Nursing (44,778 postings)
- Retail sales (27,271)
- Software developers (24,928)
- Sales representatives (20,325)
- First-line supervisors of retail sales workers (19,041)
“To put this number in perspective, there are nearly 100,000 more job openings than we have unemployed persons in Michigan,” Baruah said. “Put it another way, seven unemployed persons for every 10 job openings in the state.”
The total number of jobs in the region was nearly 2.5 million last year. Ranked by industry in the report, the top six industries for the most jobs were:
- Health care and social assistance (13.8%)
- Government (12.4%)
- Manufacturing (11.6%)
- Retail trade (10%)
- Professional, scientific and technical services (9.7%)
- Accommodation and food service (6.7%)
Wages and salaries in the Detroit region increased 5% in the 12-month period ending last September, or just a tad below the national average increase of 5.2%, the report says.
Baruah said he was impressed by the amount of growth in the region in new business applications since the COVID-19 pandemic arrived in 2020. The number of applications grew 45% between the third quarter of 2019 and the third quarter last year.
“One of the unique elements of the Great Recession is people did not start new businesses. This was an unusual pattern in a recession. Usually, people lose their jobs, they strike out on their own and create new business. This did not happen in 2007, 2009,” he said.
“The dynamic during the pandemic has been a huge spike in business application … this is a really strong signal of future economic growth,” Baruah added. “And this might be a factor in thwarting a recession. Or if we do have one, making it particularly mild.”
A major factor holding back consumer confidence in the past year, nationwide and locally, has been price inflation.
Inflation as measured by the Consumer Price Index was a bit higher in metro Detroit in October compared with the U.S. rate: 8.5% compared with 7.7% nationwide, the chamber’s report says.
However, the inflation rate in the region has been trending down since peaking in June.
Baruah said 92% of Michigan voters in the chamber’s latest statewide poll in late November and early December cited inflation as a concern.
“No big surprise there,” he said.