Three key threats to Ann Arbor area's job growth
Angela J. Cesere | AnnArbor.com
Although Washtenaw County is expected to add more than 11,000 jobs over the next three years, a few variables could disrupt the pace of growth.
Here they are:
--The European debt crisis. As the European community grapples with the massive debt loads of countries like Greece and Italy, some experts fear that the crisis could spark a global contraction in credit. That would make it more difficult for small businesses to secure loans they need to grow and hire employees, said Don Grimes and George Fulton, University of Michigan economists who conducted an economic forecast on Washtenaw County for AnnArbor.com.
“That would have a substantial impact here,” Fulton said. “It’s hard to take (Europe) off the risk list. They’re going to be on the risk list for a while.”
--A sudden spike in oil prices. The economists said the threat of turmoil in Iran, which could become engaged in a military conflict with Israel over its nuclear weapons ambitions, looms as a threat to the U.S. economy.
“Every time we’ve had a recession over the last 40 to 50 years, a major contributing factor has been an increase in gas or oil prices,” Grimes said.
With gasoline prices already above $4 at some stations in Ann Arbor, a bigger spike in oil prices could dampen consumer spending in Washtenaw County, which would have a direct impact on the jobs picture. It could also affect the sales outlook for automakers.
“If the problems escalate (in Iran), that could be a real problem,” Fulton said. “It’s feasible, but not our most likely scenario.”
--The future of Thomson Reuters. Although the global information services company is not mentioned in the economists’ report, the future of its Ann Arbor-based health care division is still up in the air. The profitable division, which employs 800 to 900 workers on Eisenhower Parkway, was briefly up for sale in 2011 before Thomson Reuters took it off the market.
Now, it’s back on the market — and could be sold soon, possibly to a private equity firm, according to the Wall Street Journal. It’s unclear whether the Ann Arbor office of Thomson Reuters would be affected by a sale. The company also employs up to 1,000 people at a tax and accounting division in Dexter.
Paul Krutko, CEO of Ann Arbor SPARK, said his economic development group is actively communicating with Thomson Reuters in hopes of convincing a prospective buyer to maintain the local operation.
“They have a good strong workforce here who’s driving that profit,” Krutko said. “We’re hopeful that we can show a potential buyer that they need to keep that operation intact and grow it. It would be a different circumstance if we were talking about a company that was losing money.”