GRAND RAPIDS – Grand Rapids’ youthful population, stable auto sector and stable housing market could all help the region avoid the recession that is coming to the country this year.
These are some of the highlights of the annual Grand Rapids Economic Forecast released today by researchers at Grand Valley State UniversitySeidman College of Business. The findings show that — absent other economic disruptions — the state’s second-largest city and its surrounding area are about to outpace the U.S. economy.
“Right now, what we’re seeing is that the Grand Rapids area is growing at twice the rate of the US economy this year,” said Seidman College Associate Dean Paul Isely. “We won’t see the same recession (as the US) and if we follow this path, we will avoid a recession here.”
Growth is expected despite the reduction in the number of workers and the reduction of specializations affecting manufacturing and hospitality. The findings also come as the Grand Rapids-Wyoming metropolitan area says it has continued its operations before the pandemic, the only metro in Michigan to do so.
Isely and GVSU Assistant Professor Kuhelika De presented their financial findings Wednesday morning at the State of Grand Rapids Business event, held annually by the Grand Rapids Area Chamber of Commercee. Graduate assistant Marcus Lynch also contributed to the report.
Demographics and ‘more’
West Michigan data still shows a decline in 2023 compared to 2022 as interest rate increases and inflation continue to affect some sectors of the economy more than others.
However, Kent County has more people in their 30s compared to residents 65 and older. The population gain is “a lot,” especially because the rest of the U.S. has a different population, Isely said.
“If you want to have more wealth, you bring in young people.” Young people are forcing other young people to come here. All this allows your company to grow as fast as you say you want to grow, and this will take additional workers,” said Isely at the event on Wednesday.
Despite the good people, finding talent remains the No. 1 priority for Grand Rapids business owners this year, Isely said.
Meanwhile, the GVSU report predicts a gradual decline in the region’s manufacturing industry as consumer spending slows. The health care industry is also facing some challenges as wages and other labor costs continue to rise.
“There will be an increase in demand,” said Dr. Darryl Elmouchi from Corewell Health West, adding that hospitals face “significant fixed costs” that do not account for the amount of money they face. This will drive the efficiency and consolidation that has been taking place in recent years.
“You will also see the integration of health,” said Elmouchi during a public meeting at the Chamber meeting.
The decline in share prices is expected to be accompanied by a 5 percent increase in inflation, said De. Supply chain issues may also continue, although some delays are beginning to be seen compared to 2022.
“We see the pressure on suppliers decreasing and decreasing gradually,” said De. “It’s not back to pre-pandemic levels, but it’s moving slowly.”
Good ideas
Opinions of the company RoMan Manufacturing Inc. President Nelson Sanchez is Pictures of Orion Construction President Brad Walsh confirmed that both are seeing a reduction in supply chain disruption.
Orion Construction has addressed these disruptions by “front-loading” operations and working with bank partners to purchase and retain as much construction equipment as possible, Walsh said.
For its report, the Seidman College of Business surveyed companies in Kent, Ottawa, Muskegon and Allegan in November and December 2022. The answers show that 33 percent of companies expect to reduce jobs, but a third of companies still expect to grow. more than 3 percent. The majority of respondents also expect their sales to increase this year by 2.3 percent.
Also, GVSU’s forecasts indicate concerns that could limit growth. For example, if consumer spending falls faster than expected, or if inflation lasts longer than expected, Isely said.
China is also starting to lift some of its COVID-19 restrictions, which will have an unknown impact as more companies develop their supply chains in other countries or resume operations in the US, Isely said.
“We have to remember that the economy still belongs to the people,” Isely said. “(People) are being asked to respond to things they’ve never done before, times that may have unintended consequences.”
