DETROIT—The metro area of Detroit went through hard times for much of the last decade, with a persistently high unemployment rate and steadily deteriorating urban core. But most experts say the region's economy looks much stronger these days, as both manufacturing and office jobs, including high-tech services, have begun sprouting in the suburbs and downtown.
"The auto industry, as well as its suppliers, is now operating at near-full capacity," Robert Kramp, vice president and director of research for the Midwest and Great Lakes regions for Jones Lang LaSalle, tells GlobeSt.com. This revival has helped drive "about 5-million-square-feet of industrial absorption in 2013, and the vacancy rate for industrial sank to 11.2%, putting Detroit in the top quartile of US cities."
JLL just published an update on employment in the metro area and found that its employers added 14,500 net jobs over the past 12 months ending in December 2013. Meanwhile, the unemployment rate decreased 2.2% over the same time period to 8.0%, higher than the national average of 6.7%, but less than half the rate recorded in July of 2009 when it spiked at 16.9%.
The pace of recovery "is very much in line with what we've seen in the other concentrated industrial markets in the US," Kramp adds. "Detroit, in effect, has gone from being a D student to being a B or a B+ student."
But the recovery has gone far beyond the city's auto industry, its historic anchor. The area provides a total of 361,700 jobs in business services, or about 17% of the total employment market, slightly more than the 309,100 in manufacturing. And in 2013, Detroit added 13,200 jobs in business services and 5,800 in manufacturing. A few thousand were lost in government, financial services and other sectors.
"Professional business services is growing and high-tech jobs are surging, mainly around the urban core, and the foundation of all this is in mortgage lending," says Kramp. "Once you get outside the urban core there is still the issue of blight," but downtown, Quicken Loans has bought, restored and populated a number of buildings with thousands of workers. The company also uses high-tech platforms to run its many businesses, attracting additional IT workers to the increasingly vibrant downtown.
"In Detroit, you've got the legacy of manufacturing, buttressed by the growing tech sectors and professional business services," he says, and that combination helps explain why the Obama Administration just decided to locate in suburban Canton one of its two new Midwestern technology hubs. Called the American Lightweight Manufacturing Innovation Institute, it will combine public and private dollars to research new materials and methods for high-tech manufacturing, and job training.
And Kramp is optimistic about 2014. Currently, developers have about 1-million-square-feet of industrial space under construction, the fastest pace in years, Kramp says. "The development pipeline is moving in the right direction."
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
