Western Michigan economy will continue to slow as business leaders worry about the presidential election, says GVSU economist.
GRAND RAPIDS, Michigan – In 2020, the western Michigan economy will experience stagnant job growth, weakening sales growth and bolstering export growth, according to a Grand Valley State University. economics teacher.
Paul Isely, professor of economics and Associate Dean of Seidman College of Business, unveiled its benchmark survey of the regional economy on Jan.23, during the Annual Colliers 2020 West Michigan Economic and commercial real estate forecasting event at DeVos Place in Grand Rapids.
Economic The region’s survey encompassed Kent, Ottawa, Muskegon and Allegan counties and was conducted in November and December 2019. According to a press release from the university, the survey was mailed to over 1,000 organizations on the basis of a representative sample.
Isely said weakness in the manufacturing sector has become the biggest problem in western Michigan. He said the number of manufacturing workers has increased nationwide, but the hours they work have decreased.
“By some measures, this puts the manufacturing sector and the corresponding transport sectors in a mild recession,” Isely explained. “Data for western Michigan and the United States shows that 2020 is likely to continue a measured slowdown. Annual growth may be positive, but a recession occurs for part of the year.”
Isely said exports have traditionally been a bright spot in the West Michigan economy, however, in recent years export growth has been weak.
“The expectation for 2020 is a moderate improvement in exports compared to 2019,” Isely said. “Export optimism is helped by positive news about trade deals.”
Isely said the main uncertainty for 2020 surrounds the presidential election. He said the uncertainty created by the estrangement of Republicans and Democrats also creates problems for business leaders trying to plan for the year ahead.
General conclusions for 2020:
- The current business confidence index for 2019 was 81%, essentially the same as the previous year;
- The forecast business confidence index for 2020 is 77.5%, a drop compared to the expectations observed in recent years;
- Employment is expected to grow by 0.3 to 0.7% in 2020, an expectation that is less than half of the expectation for 2019;
- Overall nominal sales are forecast to increase by 2.2-2.8% in 2020, a slowdown from 2019;
- Exports are forecast to increase 1.0-5.0% in 2020, up from 2019;
- All indicators point to Western Michigan’s economy will continue to slow in 2020, especially job growth.
Western Michigan economic The survey was conducted by Isely, along with staff from the West Michigan Regional Small Business Development Center, housed in the Seidman College of Business.
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