W. MI’s economy: How the pandemic could change 2021

Grand Rapids

The Grand River in downtown Grand Rapids, Mich. (Spring 2020)

GRAND RAPIDS, Mich. (WOOD) — The Grand Rapids economy is rebounding from the pandemic-prompted recession faster in some areas than expected, a new forecast concludes.

Jim Robey with the W.E. Upjohn Institute for Employment Research joined The Right Place CEO Birgit Klohs Wednesday to share economic results of 2020 and look ahead to what 2021 holds.

Robey said Moody’s Analytics recently upgraded its national outlook, giving about a one-in-three chance that the economy will be in recession in March 2021.

While this recession has been the deepest and quickest in history, Robey says the Grand Rapids market is on track to recoup its job losses around 2024.

>>PDFS: W.E. Upjohn Institute’s 2021 economic outlook | The Right Place 2020 economic report

However, Robey cautions there are a lot of unknowns that could change the region’s economic course. That includes when and how supply chain problems will resolve, how technology will impact employment, the impact of any additional economic relief and whether parents who previously relied on child care and school for their children will be able to return to work.

“You have people who need child care but there’s not enough of it,” said Robey. “it’s an incredible rate-limiting factor in West Michigan.”


On the national level, the pandemic has hit the economy harder than the Spanish flu pandemic of 1918. Robey says the economy “fell off a cliff” in the second quarter, but is rebounding. Employment is slightly higher than in December 2007.

In the Grand Rapids-Wyoming region, October’s jobless rate was 3.7%, putting it near pre-pandemic levels — one of the biggest surprises Robey encountered in his team’s analysis.

“I asked my staff to check these numbers. The unemployment rate, the labor force participation rate have rebounded in the Grand Rapids area in West Michigan region amazingly well.”

(A slide from the 2021 Economic Outlook Forecast presentation shows W.E. Upjohn Institute’s analysis of Grand Rapids’ job sectors.)

One reason for the upswing was the region’s quick recovery in the manufacturing sector, which outpaced the state and nation.

However, Robey said economic officials are particularly worried about one job sector in the area that lost about 80 percent of jobs at one point in this pandemic.

“There is a great deal of concern about what’s going to happen to accommodation and food services in West Michigan,” he said.

(A slide from the 2021 Economic Outlook Forecast presentation shows W.E. Upjohn Institute’s prediction of how Grand Rapids’ job sectors will recover.)

The restaurant industry is considered a building block for the economy, since that’s where many people in the workforce start out. The Right Place CEO Birgit Klohs says if circumstances continue, the hospitality industry will likely be the last sector to recover.

“If people get vaccinated, it might go faster,” she said, adding that business travel will also likely take longer to return to normal.

The future of Grand Rapids’ iconic furniture industry, is also uncertain. Economists say it’ll depend on how workplaces run after the pandemic ends.


Despite the unknowns, Klohs remains positive about West Michigan’s future.

“I’m an optimist,” she said at Wednesday’s presentation. “I do believe this community will thrive again.”

A rendering provided by Rockford Construction shows Perrigo’s North American headquarters, which will be housed in Michigan State University’s Innovation Park, located at the corner of Monroe Avenue NW and Michigan Street in downtown Grand Rapids.

After all, she leads an organization born in 1985 when Michigan’s unemployment rate was 20% and nearly 11% of area workers were jobless. Since then, The Right Place’s economic engine grown to support 11 counties, aided in creating and retaining 47,000 jobs and $5.1 billion in new capital investment.

Klohs said three major investments are among the highlights of her final year as CEO of The Right Place: Perrigo’s move to Grand Rapids’ Medical Mile, Gerber’s $36 billion investment in Fremont, and Packaging Compliance Lab’s $2.57 million expansion in Kentwood.

“I think those (post-pandemic) opportunities are going to be in those critical base sectors, as well as in the health care industry. There’s a three-year waiting period to get into a nursing program right now, so there are definite opportunities. And the diversity of our business base in West Michigan has been a real bonus because it means that some industries might not do as well coming back, but others are. And so it balances itself out very well,” she explained.

Robey said as long as consumers’ bills are paid, they won’t be pushing the country into further recession. He said empty store shelves and low vehicle inventory show consumers are still buying, even if they’re at home. He said the stock market is gaining from investors focused on future opportunities coming out of the pandemic.

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