The Central West Michigan economy is supported by the surprising strength of Grand Rapids. Grand Rapids was recently ranked as the fifth fastest growing city in terms of per capita growth from 2010 to 2013, according to the Bureau of Economic Analysis. Demand for office furniture is expected to improve through 2015 as the U.S. gains momentum, adding to regional economic activity. The regional economy is also linked to the auto industry, where U.S. sales have increased along with strong overall job growth, increasing consumer confidence and lower gasoline prices. According to the Western Michigan Purchasing Managers Survey, new orders for area manufacturers were positive in November after strong gains in October. Employment and production indexes continued to show growth. Expectations of future manufacturing conditions remain positive. In addition to its improving manufacturing base, the regional economy is benefitting from gains in high-tech industries, healthcare and business services.
Moderate job growth brought regional unemployment down to 5.6 percent in the third quarter of 2014, just below the U.S. average. We expect to see the unemployment rate continue to trend down below the U.S. average, reaching below five percent by the end of 2015. As labor markets tighten, real (after inflation) wages will increase, providing support to area retailers and to the housing market.
House construction, after seeing significant growth in 2013, is expected to show a more modest 6.3 percent increase in 2014. Currently low inventories are constraining home sales. According to Trulia, the average price per square foot for a home in Grand Rapids was $132 in December, up 8.2 percent from a year ago. Ongoing economic growth, accompanied by easing credit standards, will be supportive of area housing markets in 2015.
Click here for the complete Central West Michigan Regional Economic Update:CentralWestMI 2014Q3.