Effect of economy: Report shows economic outlook for Copper Country

Garrett Neese/Daily Mining Gazette The audience listens to a presentation on a economic report for Baraga, Houghton, Keweenaw, Ontonagon counties at Michigan Technological University Thursday.

HOUGHTON — There is reason for optimism about the Copper Country’s economy, but also some potential stumbling blocks, according to Michigan Technological University students behind an economic outlook report presented at Tech Thursday.

Students and staff presented the first KHOB (Keweenaw, Houghton, Ontonagon, Baraga) Economic Outlook Report on how the four-county area has performed economically since 2000 and where it is headed.

The report was prepared by Michigan Technological University’s Economic Club. The report was proposed by Superior National Bank, which gave the club a donation towards completing the report.

Assistant professor of economics and club advisor Emanuel Xavier-Oliveira led the presentation of the numbers.

The overall growth trend of the counties’ economies is promising, said Economics Club member Jon Ruf.

The biggest obstacles foreseen by the group are a declining population, travel costs and high energy costs, Ruf said. Declining labor force participation also presents a problem.

The area’s population dropped by an average of 0.34 percent from 2010 to 2017, Xavier-Oliveira said. Houghton posted the smallest decline in that time, falling by only 0.02 percent. The only county above 1 percent in that span was Ontonagon, which dropped by 1.85 percent.

“I wouldn’t really call it an exodus, but it’s something we should pay attention to,” he said.

Trends showed both unemployment and the size of the labor force jumping sharply in 2009, then declining from there. Ontonagon and Baraga saw the biggest declines in labor participation, though that began stabilizing around 2013, Oliveira said.

Inflation-adjusted wages rose by an average of 0.94 percent from 2010 to 2017, trailing behind Michigan’s rate of 2.25 percent. At 1.84 percent, Keweenaw County showed the largest jump. The only county with a decline in real wages was Ontonagon, with an average drop of 0.97 percent.

Oliveira identified a surge in housing permits in Houghton County in 2017, driving up the four-county numbers.

“We should see this extra work showing up in the GDP in the local counties — particularly in Houghton, but in all four of them, because of the commuting,” he said. “…It’s betting on the future of the region. I hope they are right.”

The report identified four main economic sectors contributing to the economy: health care and social assistance; construction; retail and manufacturing.

In the future, Ruf said, the club would like to augment the data with surveys — “go down to the most granular level possible and see from you guys, what the population itself, what you think the future’s going to be like.”

Putting the initial report together took a semester’s worth of work, said Club President Sarah Goble.

“It’s really interesting, and I’d like to continue, but it’s going to depend on interest from the entire community,” she said.

State Rep.-elect Greg Markkanen said the report had shown some bright points for the future, but also the need to move forward.

“Companies like Highland Copper, and other companies in Baraga County that are looking to expand, we need to assist that, and give the opportunity for students that want to stay here to stay here,” he said.

Career and technical education has gotten a boost locally with the Copper Country Intermediate School District’s millage, but should also be expanded, he said.