GRAND RAPIDS, Mich. (WOOD) – Move over, auto and furniture manufacturing – there’s a new hot industry in West Michigan.
“What we’ve started to see is an explosion on the service side,” said Paul Isely, an economics expert with Grand Valley State University.
Isely revealed his economic forecast Thursday morning at DeVos Place, during the 2016 Colliers International West Michigan Economic and Commercial Real Estate Forecast event. Real estate experts said that industry will remain steady in 2016.
2016 vs. 2015 predictions
- Employment up 2.6-3.0 percent
- Economic growth slower
- Export growth much weaker
Isely said businesses that provide services, including restaurants, are growing stronger. However, Isley said the manufacturing industry remains the backbone of West Michigan’s comeback.
“As we came out of the Great Recession, manufacturing really caused the expansion. It caused that breakneck expansion and a lot of that had to do with the automotive and furniture industries,” he explained.
Isely said while West Michigan is seeing more young workers come to the area for the first time in a long time, there are still not enough workers to generate growth.
“Plus, the number of high school graduates will be radically dropping in size in the next five years, so we need to draw even more people from outside the region to maintain what we have,” he stated.
Isely’s forecast is based on a survey of Kent, Ottawa, Muskegon and Allegan counties conducted in November and December.
Isely said this year, the growth rate of the greater Grand Rapids economy will drop below the 3 percent range, which is closer to the national average. Isely said the export industry has deteriorated the most.
“The number one think to know is we have one more good year and we’re starting to get close to the next recession. But we’re not there yet. It’s going to be a good year for the middle class – wages are going to go up,” Isely added.
Isely said that while the greater Grand Rapids’ economy has plateaued and a recession is coming, it will be a smaller dip, barring ‘a new shock.’