The Central West Michigan (CWM) region, with auto, manufacturing, services, and furniture industries as the major drivers of the economy, comprises about 24 percent of the total nonfarm payroll jobs in Michigan. In 2014Q1 CWM added a net of 4,400 nonfarm payroll jobs in contrast to 10,000 jobs in 2013Q1. Most of the new jobs in early 2014 came from service producing industries, followed by manufacturing. Although the job growth looks a bit softer in 2014Q1 compared to 2013Q1, the region is still a strong performer compared to the entire state of Michigan, which has lost a net of 11,000 nonfarm jobs in the first quarter of this year. We expect the current pace of moderate job growth in the region to continue through 2014 with most jobs coming from manufacturing (machinery, food, and auto) and service producing sectors. Because of its strategic location and its skilled labor force, the region has been a strong magnet for manufacturing industries.
CWM’s unemployment rate declined to 5.8 percent in 2014Q1 from 6.7 of the previous quarter. The decline in unemployment came as both payroll employment and the labor force increased, a good news for the economy. We expect the region’s unemployment rate to decline continuously through 2014 due to a modest improvement in payroll jobs. Both single- and multifamily housing starts declined in the first quarter of 2014 after a significant surge in 2013Q4. We expect the total housing starts to rebound in the next quarter and grow moderately through 2014. House prices are expected to grow moderately at par with the national average in 2014 and 2015.
Kellogg, one of the world’s largest cereal producing companies, with 2013 total sales revenue of around $14.8 billion, will open a new North American Global Business Service operation in the Grand Rapids area. The center will employ between 300 and 600 workers. We also expect the office furniture industry to pick up through 2015 as business investment improves across the country. The region’s auto industry is expected to add only a modest number of jobs. National vehicle sales are forecasted to improve through 2015. However, job creation appears to be leveling out in the auto industry as sales approach the high-water mark for this business cycle.
Click here for the complete Central West Michigan Regional Economic Update: CentralWestMI 2014Q1.