WOOD Radio Local News

WOOD Radio Local News

WOOD Radio Local News

 

GVSU Seidman Economic Forecast predicts up to 2-percent growth in GR

GRAND RAPIDS, Mich. -- The Grand Valley State Seidman College of Business has released its Grand Rapids Economic Forecast for 2023.

It is an annual benchmark survey of the economy in Kent, Ottawa, Allegan and Muskegon counties. On Friday morning, Dr. Paul Isely and Dr. Kuhelika De presented an update at DeVos Place on where the West Michigan economy currently stands and where it will be going in the next year. Graduate Assistant Marcus Lynch helped compile the economic report.

It is based on a survey that was mailed to business leaders in Kent, Ottawa, Muskegon and Allegan counties in December. The report predicts employment to grow by 1.6 percent to 2 percent this year. Associate dean Dr. Isely tells WOOD Radio that is nearly double the national growth rate.

"We see more employment growth, we see more sales growth. And a lot of that has to do with the fact that we have a lot of young people here in West Michigan," he said.

The annual forecast predicts wages will rise by 3-point-9 percent to 4-point-3 percent. That is slower than the increases last year.

"Wage growth will stay below the rate of inflation this year, but it will still be a pretty good wage increase, particularly for the people in the bottom 50 percent," Isely said.

Some bullet points, as posted on the Seidman Business Review:

  • The Current Business Confidence Index for the end of 2022 is 69.6%, lower than expected last year.
  • The Forecast Business Confidence Index for 2023 is 67.2%, showing reduced expectations for 2023.
  • Employment is expected to grow by 1.6% to 2.0% in 2023, showing slower growth than 2022.
  • Overall nominal sales are expected to increase by 2.0%-2.6% for 2023, a slowdown in growth expectations from 2022.
  • Wages are expected to increase by 3.9% - 4.3% for 2023 slower than the increases seen in 2022.
  • Prices are expected to increase by 5.3% - 5.9% for 2023 slowing the inflation seen during 2022.
  • All indicators signal the West Michigan economy will slow during 2023.

Last year employment for KOMA was projected to grow at an average of 2.9%, and so far between November 2021 and November 2022 the region grew by 2.7%. Businesses have been unable to hire at the rate they wanted as there are not enough applicants in the labor pool. Over the next few months as the economy slows, businesses will finally be able to make progress with their hiring plans. 

Average employment in the KOMA region during 2023 is expected to grow at a much slower pace of 1.8%, provided there are enough people in the labor force. Last year only 2% of firms expected to see employment shrink. This year 33% of firms expect to cut employment. However, a third of firms still expect to grow at more than 3%. This is consistent with firms trying to catch up on hiring. It also shows that the anticipated slowdown will affect sectors differently.

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