As it pertained toWestMichigan’s strongest industries, such as advanced manufacturing and agribusiness, Robeyechoed Klohs’ earlier statements regarding the impact of trade and uncertainty on West Michigan’s economy, addressing the United States–Mexico– Canada Agreement (USMCA) in particular. “It is essential for Michigan's economy that USMCA is passed,” said Robey, “Exports account for roughly $58 billion of Michigan’s economy. Canada and Mexico are our largest trading partners, making up roughly two-thirds of our trade activity.” THE BIG PICTURE 2019 proved to be another excellent year forWest Michigan’s economy. Increases in job growth and capital investment continued to drive economic progress in the region, exceeding our team’s goals here at The Right Place. As we look to the next year and the roll-out of our 2020-22 Strategic Plan, we are excited to present our new goals and areas of focus, whichwe hope will ensure thatWest Michigan remains a globally competitive economy into 2020 and beyond. As always, we will face unique challenges and opportunities along the way, but we are confident that the business and community leaders here inWest Michigan will be able to guide our region in a positive direction. As Klohs said in her closing remarks, “I have no doubt that if we identify a problem in this community, we will figure out how to tackle it, because that is what we do.” We look forward to continuing our work in West Michigan and wish all of our area businessescontinued success in theNewYear.
With the future of work undergoing a seismic shift, the ever-present skills gap is something businesses, individuals, and community stakeholders alike will need to come together to tackle in order to fill newand changing positionswithqualified candidates. They will also need to ask of themselves, ‘Howcanourregionensurewe are a destination where talented people of all backgrounds want to live and work?’. There is no community in the country that can afford the consequences of leaving people behind any longer. THE NATIONAL ECONOMY Director of Regional Economic Planning Services for the W.E. Upjohn Institute, Jim Robey, tackled the broader picture of what 2019 had in store for the national economy, and what could be expected in 2020. TheU.S. is in its longest period of expansion since World War II, spanning 125 months. The likelihood of a recession in the next 6 months is still relatively low, with Moody Analytics’ prediction at a 9% chance. Supporting this statement, Robey reported that GDP is forecasted to hover around a 1.7% growth rate for the next two years, while the rate of employment growth will continue slowing into 2020-21. Additionally, national unemployment rates are expected to remain low for 2020/2021 at around 3.5% and 3.4%, respectively. This means hiring challenges will persist for businesses nationwide WEST MICHIGAN’S ECONOMY By and large, Michigan has continued to outperform expectations. TheGrandRapidsMetropolitanStatistical Area (MSA), which includes Kent, Montcalm, Ottawa, and Barry Counties, has an unemployment rate of 3.0%. Unemployment rates in West Michigan’s 13 counties fall between 2.3-4.7%, and the rate of unemployment for the state is at 4.1%. Grand Rapids has also continued tooutpace the state and the nation in post-recession recovery and employment growth, though rates for both are beginning to slow. Employment rates for Grand Rapids are forecasted to grow by 0.7% in 2020, a 0.3% decrease from growth rates seen in 2019.
It is estimated that more than 50,000 jobs in West Michigan depend heavily on international trade and export activity. With more than 530 regional manufacturing and engineering firms supplying the automotive industry, 55,000 jobs have the potential to be affected at any given time by pressures or changes felt by original equipment manufacturers (OEMs). That uncertainty, Klohs said, is bad for businesses across the board. Erosion of Local Ownership Uncertainty is also swirling among local business ownerswho find themselves unsure of who will take over their companies as they begin nearing retirement age. Family-owned and operated businesses have always been a unique, key asset to West Michigan’s economy, with 65% of jobs and an estimated $25.8 billion in the region coming from this sector. Private equity firm acquisitions change the makeup of the community and the conversations had surrounding business retention and expansion, while also affecting the longevity of these companies in the region. It has become exceedingly important to find ways to preserve local ownership in West Michigan, as family- owned businesses are also more likely to be actively involved in their communities and be more philanthropic. Industry 4.0 Theworld is in themiddleof a transformation regarding the way it produces products due to Industry 4.0. This newera of technology, powered by data and machine learning, will enhance production with smart and autonomous systems. In order for West Michigan to remain competitive as a region, it is essential that business leaders are staying ahead of the curvewhen it comes to these advancements. The adoption of Industry 4.0 will be essential to the continued growth of the Just like the rest of the country, talent has been one of West Michigan’s leading issues for the past several years. Employers are clamoring to retain the talent they have, while also trying to fill much-needed open positions. Ultimately, population growth stimulates economic growth, and as it stands, the U.S. birth rate is now at 1.77, while the rate of replacement is at 2.1. West Michigan economy. Talent and Inclusion
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2020 ECONOMIC OUTLOOK
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