As Michigan emerges from a tough and long winter, the state economy is improving. While the strong dollar has started to hit manufacturers’ export sales, vehicle demand remains firm and near its cyclical high, driving high-paying jobs in the region. Low gasoline prices will contribute to regional tourism, as fishing season and other outdoor activities open for the season. Ann Arbor and Grand Rapids are both experiencing a great deal of improvement initiatives, like “GR Forward,” which is redirecting millions of tax dollars to public spaces.
Labor markets in Central West Michigan continue to improve, with unemployment dropping to an average of 4.38 percent in 2015Q1. Google recently announced intentions to expand its office space in the area, and the MADA/Office Furniture Industry Trends survey has remained strong, indicating that 2015 will be the best year in a decade for office furniture. The Western Michigan Purchasing Manager’s Index reinforces the generally positive outlook for regional business; new orders have increased substantially in the region, and supply lags from the California port dispute are decreasing. The region’s job growth will be sustained, but the growth sectors will pivot towards services as the strong dollar hurts U.S. exports.
Unsurprisingly, housing metrics dragged through the winter. Year-over-year gains in house prices have remained above five percent for six quarters, and the tightening labor markets of Central West Michigan will only aid the springtime bounce-back for housing starts and sales. Area realtors are reporting limited inventories. The American Institute for Economic Research recently named Ann Arbor as the number one small city for college graduates due to its rich concentration of an educated population and appealing tech jobs. Grand Rapids came in at number 12. Income growth in Central West Michigan has outpaced the rest of the state, and will continue to do so as former residents return due to its improving quality of life.
Click here for the complete Central West Michigan Regional Economic Update: CentralWestMI 2015Q2.