Expert: Local economy is moving forward, but stuck in ‘second gear’

Mark Brooky • Jul 21, 2015 at 11:22 AM

However, while the economic recovery shifted forward in 2011, it remains stuck in “second gear,” George Erickcek said.

Erickcek is the senior regional analyst for the Kalamazoo-based W.E. Upjohn Institute for Employment Research. He makes similar presentations each year throughout West Michigan.

Tuesday morning was the Grand Haven area’s turn. The program also kicked off the local Chamber of Commerce’s Tuesday Forum series.

In Ottawa County specifically, Erickcek said last year saw “robust” employment growth. More than 2,500 jobs were created in 2011, led by a surge in manufacturing not seen in several years.

“As you see with this recovery, manufacturing is key to the health of Ottawa County and for Grand Haven,” Erickcek said at the forum held at the Grand Haven Community Center. “... Besides that, we make some really neat stuff here, so we want to keep that.”

The national setting, Erickcek said, is looking better than just a couple of months ago; however, “we still can’t get out of second gear.”

Third gear, according to Erickcek, is to get the consumer confidence engine revving high and stable.

“Consumers are still pessimistic,” he said. “However, they were feeling better at the end of the year.”

While federal policy is on hold until after the 2012 elections, Erickcek said corporations and banks are holding a lot of cash, and interest rates are low.

“The stage could be set for a business investment expansion,” he explained. “Corporations are making money without hiring workers — a clear break from the past.”

The employment picture in Michigan — especially in the vitally important auto industry — has stabilized, Erickcek reported. During the fourth quarter of 2011, employment was up 1.5 percent in Michigan from a year ago, equating to an increase of more than 56,000 jobs.

The economic forecast from the University of Michigan is for 31,500 new jobs in the state this year and another 37,200 to be added in 2013. Erickcek said signs point to increases of 2.8 percent in 2012 and 2.6 percent in 2013 in the total number of employed in Ottawa County.

Joy Gaasch, president of the Chamber of Commerce Grand Haven-Spring Lake-Ferrysburg, said she was very optimistic about Erickcek’s report.

“As we meet with our manufacturers in the community, it really solidified what we’re hearing from them and what we’re seeing from them,” Gaasch said. “We’re kind of unique in Ottawa County, that we’re really doing better than a lot of other areas — and we’re very thankful for that, and we want to make sure that continues.”

Gaasch concluded the forum by asking Erickcek his opinion should Ottawa County — its own metropolitan statistical area called Holland-Grand Haven since 2003 — be merged back into the greater Grand Rapids MSA.

Erickcek said the federal Office of Management and Budget determines such markets based on “community habits.” When last reviewed, the OMB said 24.6 percent of Ottawa County residents commute to work in other counties, mainly Kent County, which helped create the standalone Holland-Grand Haven MSA.

“Right now, according to the latest stats, the percentage of residents waking up every morning and going to Kent County is 29 percent, well-above the 25-percent threshold,” Erickcek said.

Should that threshold be maintained at the next review, perhaps as early as later this year, Ottawa County would become part of the Grand Rapids metro.

Gaasch said that would a shame.

“My concern is that the smaller market area that we have gives us an advantage to really promote those amazing things like ‘Healthy and Happiest,’ and the highest percentage of (population) growth rate,” she said.

Next month’s Tuesday Forum will feature Dr. Timothy Bartik, author of “Investing in Kids: Early Childhood Programs and Local Economic Development.” It will take place at the Grand Haven Community Center, 421 Columbus Ave., from 7:30-9:30 a.m. March 6. For reservations, call the Chamber of Commerce at 842-4910.

To see more photos from the forum, click here.

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