Central West Michigan’s unemployment rate of 8.2 percent in 3Q2011 was well below Michigan’s overall rate of 9.8 percent as of November and the national rate of 8.6 for that month. This does mask some intra-regional differences, though, as the Ann Arbor metro area’s unemployment rate of 6.1 percent as of November, is more than 1.5 percent below the rate of the other three metropolitan areas comprising Central West Michigan (Grand Rapids, Kalamazoo and Lansing). Ann Arbor’s lower unemployment rate is due in large part to its economic diversification, compared with other the local economies tied more closely to manufacturing. Out of the top 10 employers in the Ann Arbor area, only one is an automotive parts manufacturer, with the rest comprised of educational bodies, medical and software information companies. Job growth in the Central West Michigan region was a strong 1.8 percent in 2011, 0.8 percent better than nationally.
Home prices in Central West Michigan have fallen roughly 20 percent since their 2005Q3 peak. The U.S., by comparison, has fallen about 16 percent from its much later peak in 2007Q1. Housing starts in the region have resumed a steady slide, after some improvement in late 2009 through mid 2010. Much of the drag in the last several quarters has been from single-family construction. Multifamily starts were up nearly 40 percent on an annual basis in 2011. This is consistent with patterns elsewhere in the country, where lower homeownership rates and tighter mortgage credit conditions are fueling multifamily rental growth.
Looking ahead, the Central West Michigan region, like most other areas of the state, faces demographic challenges, with all four metro areas in the region expected to show continued net out-migration.
Click here for the complete Central West Michigan Regional Economic Update, including a forecast table and charts of regional economic activity: CWMichigan2012Q1.