The University of Michigan’s Research Seminar in Quantitative Economics (RSQE) is an economic modeling and forecasting unit that has been in operation since 1952. As part of their yearly work program, they produce a forecast of the Washtenaw County economy for the next few years. The most recent forecast was presented March 25, 2021. Links to the full report and presentation recording are below, what follows is a brief summary of the forecast.
Washtenaw County’s economy has recovered substantial ground from the losses it suffered at the beginning of the COVID-19 recession, but there is more work to be done. The existing gaps (geographic, socioeconomic, and racial) present in unemployment, wages, industries, and educational attainment groups have been exacerbated by the recession.
Certain industry categories are forecasted to make a full recovery, with some industries (like information and transportation and warehousing) having actually added jobs in 2020. Other industry categories are forecasted to make incomplete recoveries, with some failing to reach their 2019 levels in two years (especially some subsets of retail and manufacturing). According to RSQE, progress against the pandemic will allow economic activity to return largely to normal by late summer/early fall.
This forecast relies on solid economic growth at the national level. Unprecedented federal fiscal support insulated the national economy from a more severe contraction. The largest risk continues to be the pandemic. An improved public health situation plus an aggressive economic policy response (in the form of federal funding) results in an optimistic outlook.
2020 highlighted pre-existing gaps in a big way. One group gains while another group loses. The differences in the pandemic recession are between contact-heavy jobs vs. jobs that can be done remotely. Unfortunately, this bifurcation comprises low-wage jobs vs. high-wage jobs and renters vs. homeowners. The experience of the pandemic and the accompanying recession (and now recovery) is felt very differently by workers in those disparate groups.