T he West Michigan economy has experienced significant growth since the Great Recession. Many West Michigan businesses are thriving and the region’s job market numbers are outpacing the state and national figures in many instances. While the region has been growing at a rapid pace, we are beginning to see signs this pace is cooling slightly. Persistent challenges, such as a tight labor market and volatility in several industries, continue to affect business in the region. Those are the high-level insights our team has drawn based on both our organization’s economic development work last year and the quantitative labor market information available forWest Michigan. This report will detail some of the trends we are seeing in the data and observing as we meet with companies in the region. We meet with nearly 400 companies annually in the region to assist them with their business growth and any challenges they may be facing. Specifically, we serve businesses in Kent, Ionia, Montcalm, Newaygo, Lake, and Oceana counties. During these meetings, we talk with companies about their future plans and any barriers to growth they are experiencing. These conversations give us qualitative insights into the economic health of the industries we serve, which include advanced manufacturing, food processing and agribusiness, information technology and communications, and medical devices and life sciences. Our business research and intelligence team is then able to compare that information with quantitative labor market information from the Economic Modeling Specialists International platform (EMSI). This combination of qualitative and quantitative data provides a more complete picture of regional economic trends inWestMichigan, which are detailed in the following sections. WHAT AREAS OF WEST MICHIGAN ARE INCLUDED? For this article, we have included the six counties where The Right Place provides direct business development support services to local businesses: Kent, Ionia, Newaygo, Montcalm, Lake, and Oceana counties.
REGIONAL JOB GROWTH TRENDS Sources: • Economic Modeling Specialists International (EMSI) • Bureau of Labor Statistics - Local Area Unemployment Statistics To begin, we will dive into Emsi’s quantitative data on regional job growth trends for West Michigan. Despite regional unemployment rates hovering between 3-4% the past two years, employers in the region added nearly 12,575 jobs between 2016 and 2018, and the overall job growth rate was 3% across all industries. While job growth was slightly stronger than the state and national rates of 2%, the region added half as many jobs between 2016-2018 as it did between 2015-2017. This is likely due to a combination of an extremely tight labor market and other global trends playing out in the region. JOB GROWTH BY INDUSTRY SECTOR Four industry sectors continued to lead West Michigan’s job growth between 2016 and 2018: agribusiness and food processing, advanced manufacturing, construction, and services. (See Figure 1) Although employers across all industries contributed to West Michigan’s notable job growth rate, these industries experienced some of the strongest growth.
ADVANCEDMANUFACTURING (+3% job growth, 2,000 new jobs) Manufacturing job growth inWest Michigan grew by 3%. That figure is slightly lower than Michigan’s 4% growth rate, however, both the region and state considerably exceeded the nation’s manufacturing growth rate of 1%. West Michigan continues to maintain its long-standing reputation of being a leader in this industry. Within the advanced manufacturing sector, three supply chain-related subsectors continued to experience notable job growth, indicating the strength of West Michigan’s manufacturing supply chain: Furniture and Related Product Manufacturing (+10%, 682 new jobs), Machinery Manufacturing (+5%, 470 new jobs), Transportation and Equipment Manufacturing (+2%,316 new jobs), and Electrical Equipment and Component Manufacturing (+9%, 165 new jobs). AGRIBUSINESS & FOOD PROCESSING (+3% job growth, 550 new jobs) Agribusiness and food processing job growth in West Michigan experienced a 3% job growth rate, on par with state growth and slightly faster than the national rate of 2%. Within that sector, food manufacturing jobs rose 11%.
Figure 1.
JOB GROWTH BY INDUSTRY SECTOR, 2016-2018 7% 8%
0% 1% 6% 5% 4% 3% 2%
Ag & Food Processing
Advanced Manufacturing
Construction
Services
West Michigan
Michigan
United States
9
STATE OF OUR REGION
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