GRAND RAPIDS, Mich. (WOOD) — After nearly two years of a pandemic-driven economy, a new economic forecast is largely favorable for West Michigan.
The economy has rebounded in West Michigan quicker than many had expected, said The Right Place, Inc. President Randy Thelen and University of Michigan economist Don Grimes.
The two released their economic forecast for the area Thursday. While they noted challenges going forward, there are also many positives in their projections.
Thelen, who heads up West Michigan’s economic development agency, began his remarks with a reality that is true for not just west Michigan, but for economies around the globe.
“This is an economically cloudy time, no question,” Thelen said. “Nobody here watching today has ever gone through an economy quite like this, a pandemic and the economic recovery. It’s truly, truly unprecedented.”
Unprecedented, yes; but according to Grimes, the clouds may be parting.
“The most positive thing is that … if you dump a lot of money into the economy in fiscal and monetary stimulus, you can really overcome a lot of slack demand,” Grimes said. “Normally it creates a lot of slack demand during a recession. We came out of this recession much faster than we ever expected.”
That’s the upside, but a lot of money rapidly dumped into the economy has side effects.
“The most troubling thing, and partly it’s a product of that fast recovery, is the high inflation rate,” Grimes noted.
He said it will be tricky for the Federal Reserve to balance trying to control inflation with keeping the recovery momentum moving.
Thelen sees a strong West Michigan economy that needs more people to fill jobs to keep it going.
“The most promising element of the forecast is that our West Michigan economy has proven to be resilient,” he said. “The challenge ahead for us certainly comes back to that labor force. Between our unemployed population today and those who left the workforce, we have about 65,000 people that are currently not engaged in the workforce and we need to find a way to invite them back, back to work.”
Grimes believes that employment levels should be very near pre-pandemic levels by the end of 2023.