Central West Michigan Economy Lost Steam Heading into 2013

  • Following a slight decline in employment in the third quarter, payrolls fell by another 2.1 percent annualized in the fourth quarter in the Central West Michigan region. A revitalized auto manufacturing sector helped boost employment across the region in the first half of 2012, but gains from ramped up production lost steam in the second half of the year. Central West Michigan furniture manufacturers are feeling steadier, but demand was flat through 2012 as office construction remained weak nationally. There are anecdotal signs that 2013 could see office construction improve, which would be a large positive for Central West Michigan employers. Currently, however, regional payrolls are expected to struggle with growth through 2013. Local unemployment averaged 6.4 percent for the fourth quarter, a modest improvement from the third quarter average of 6.7 percent. All four metropolitan areas comprising Central West Michigan, however, saw upticks in unemployment for December. The region’s unemployment rate remains well-below the national rate of 7.8 percent.
  • Home prices declined only slightly in year-ago comparisons through the first three quarters of 2012, by about 0.5 percent, and should continue to stabilize, moving into positive territory for the fourth quarter and into 2013. Housing starts in the region rose steadily over the course of the year, driven mostly by improvement in single-family construction. Commercial construction activity is also picking up selectively, with Grand Rapids notching a fourth quarter surge in multifamily development.
  • Looking ahead, the Central West Michigan region faces economic challenges stemming from relatively weak population growth. Population growth in the area is expected to continue to lag that of the nation. Incomes in Central West Michigan are expected to grow in the range of 2.5 percent through 2013, somewhat lagging national income growth over the same period.

 

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Click here for the complete Central West Michigan Regional Economic Update: CentralWestMI 2013Q1.

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