Economic forecast: 2013-14 'good years'

GRAND RAPIDS, Mich. (WOOD) - West Michigan saw 5,000 new jobs and a drop in unemployment in 2012, and analysts see the trend continuing in 2013.

The annual West Michigan Economic Outlook was released Thursday, and George Erickcek, the senior regional analyst for the Upjohn Institute, said, "As long as demand continues to grow nationwide, 2013 and 2014 should be good years for West Michigan and Grand Rapids."

The Right Place, Inc. Thursday hosted the 15th Annual West Michigan Economic Outlook at the Amway Grand Plaza Hotel in downtown Grand Rapids.

Based on forecasting models and extensive research, Erickcek presented an overview of existing economic, automotive, office furniture, service, and retail industry sector trends, as well as a short-term employment forecast for the greater Grand Rapids area.

The prediction for 2013 is for unemployment to fall to about 6% based on an increase in manufacturing and service jobs.

Here is a further breakdown of the business outlook --

Manufacturing Sector Stalls

The national economy grew at a 2.7 percent annualized rate during the third quarter of 2012; however, employment in the six metropolitan areas of west Michigan fell by 0.6 percent, a loss of nearly 5,000 jobs.  Despite the quarter’s negative employment performance, the regional unemployment rate stood at 7.5 percent.  Employment in the region’s goods-producing sectors fell by 0.3 percent during the third quarter, and employment in the region’s private service–providing and government sectors fell by 0.9 percent.  Only government employment grew during the quarter, rising by 0.5 percent from the second quarter.  

West Michigan’s economic indicators were positive during the third quarter, suggesting that employment conditions could improve in the coming months. Initial claims for unemployment insurance fell by 1.6 percent, and the number of new residential units put under contract for construction jumped up by 22.3 percent. Finally, Google Insights for Search, which tracks searches in the welfare and unemployment assistance, remained stable in the third quarter as well.

BATTLE CREEK MSA

Total employment in Calhoun County fell by 0.4 percent in the third quarter, due to employment losses in its private service–providing sector. Still, the region’s unemployment rate stayed at 7.2 percent. The region’s limited economic indicators were mixed for the quarter, suggesting that employment conditions may remain soft in the coming months.

Employment in the area’s goods-producing sector inched up by 0.1 percent during the third quarter due to a 0.5 percent gain in manufacturing employment.  Employment in construction fell by 2.4 percent during the quarter.  Employment in the area’s private-services providing sector fell by 1.3 percent, a loss of more than 400 jobs.  Employers in retail, education and health services, and other services reported the largest percent declines.  Surprisingly, employment in the area’s government sector increased by 1.7 percent during the quarter.

The area’s two economic indicators moved in the opposite direction during the quarter.  The number of initial claims for unemployment insurance rose modestly by 3.9 percent, suggesting that employment conditions could remain sluggish. However, the number of new dwelling units put under contract for construction jumped up by 117.4 percent.

GRAND RAPIDS–WYOMING MSA

Total employment in the Grand Rapids–Wyoming MSA increased by 0.6 percent during the third quarter.  Employment gains were reported in the area’s goods-producing sector, private service–providing sector, and its government sector.  The quarter’s employment growth in the area pushed its unemployment rate down to 6.7 percent.  Moreover, the region’s economic indicators were positive during the quarter, which suggests that employment conditions may remain solid in the coming months.

Goods-producing employment was up 0.5 percent during the quarter as employment gains were reported in construction, a 3.7 percent gain.  However, the area’s manufacturers trimmed their workforce by 0.1 percent.  Employment in the area’s private service–providing sector increased by 0.5 percent and government employment rose by a robust 2.0 percent. Strong employment increases were reported in leisure and hospitality, and professional and business services.

Local economic indicators were positive during the third quarter, which suggests that employment growth in the area may continue in the coming months.  Initial claims for unemployment insurance declined by 4.7 percent, and the number of new-dwelling-unit contracts also increased by 45.5 percent during the quarter.

HOLLAND–GRAND HAVEN MSA

Employment in Ottawa County fell by a large 1.7 percent during the third quarter, a loss of nearly 2,000 jobs.  Employment in its goods-producing sector was off by 0.4 percent, and the area’s private service–providing employers decreased their payrolls by 3.0 percent.  Government employment inched down by 0.2 percent