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DETROIT-The doldrums in the industrial sector for commercial real estate brokers is unlikely to ease any time soon. According to recently released state data, the tri-county Detroit area has lost almost 1,000 industrial employers in the first half of this decade.

With industrial companies going under, the area’s largest brokerage firms are reporting industrial vacancy rates ranging from 10.6% reported by Grubb & Ellis for the second quarter of 2005, to the 13.9% reported by Signature Associates. According to the Michigan Department of Labor & Economic Growth, the metro-area counties of Wayne, Oakland and Macomb had 7,442 locations where people were employed in some type of manufacturing position in 2000. By 2004, that number had dropped to 6,445.

Corresponding with that change was a decline by almost 90,000 in the number of people employed in all types of manufacturing in the three counties. “We’ve lost one of every four manufacturing jobs we had in June of 2000,” says Jay Wortley, senior economist at the nonpartisan Senate Fiscal Agency. “To me, that’s the number that is really staggering.”

The decline in the number of firms–many by bankruptcy or smaller firms that simply faded away–means that those jobs and that type of work is unlikely to come back anytime soon, says Jim Jacobs, an economist at Macomb Community College. “We are moving to being the brain center of the automotive industry, rather than the brawn center,” he says.

While the number of manufacturing facilities has been declining–just last week, TRW Automotive announced plans to close a 50-year-old plant in Sterling Heights and another in Jackson County, it had already closed one in Brighton last month–the number of research and office centers related to the auto industry has been increasing. During the past five years, more than 130 R&D centers, design facilities or headquarters offices of automotive companies have opened in Southeast Michigan. Headlining that list is a yet-to-be-built Toyota R&D center planned on more than 100 acres near Ann Arbor in Washtenaw County. Jacobs says the area will continue to reposition itself to attract new types of companies. “We’ve lived through other restructurings, and we’ll live through this one,” Wortley says. “It’s just that through the process it can be painful.”

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