The Central West Michigan (CWM) region, home to auto, manufacturing, and office furniture industries, grew better than expected, especially in the second quarter of 2014. Payroll jobs were up by 2.7 percent year-over-year, adding a net of 12,000 jobs in the first half of the year compared to 9,000 jobs in the same period last year. Consequently, the region’s unemployment rate declined to 5.6 percent ending in 2014Q2, down by 1.3 percent from the same period last year. The decline in unemployment came from a modest improvement in household employment. On the upside, the labor force also grew better than expected in 2014Q2, good news for the economy. However, a subdued net migration outlook and consequent low population growth remains one of the major concerns for the region going forward.
The housing market is picking up in the region with home prices growing above 5 percent year-over-year for three consecutive quarters from 2013Q3 to 2014Q1. We expect home prices to grow moderately below the national average for the remainder of the year. Total housing starts are up significantly in the second quarter fueled by a surge in both single and multifamily housing starts. As home builders’ confidence surged for the third consecutive month in August, we expect continued improvement in the housing market across the region.
Nationwide, auto sales peaked at 16.9 million units in June after a chilling winter. Motor vehicle assemblies were up 27 percent year-to-year in July, to a 13.2 million unit annual rate, indicating revitalized assembly lines across the nation. The U.S. office equipment manufacturing outlook is improving. We expect office furniture sales to increase over 2015, consistent with expected gains in business confidence and business investment.
Click here for the complete Central West Michigan Regional Economic Update: CentralWestMI 2014Q2.