GVSU economist predicts slower growth for 2017

"The economic outlook for West Michigan is positive and steady with some unique challenges to overcome," said Paul Isely, professor of economics and associate dean in Grand Valley's Seidman College of Business.

Isely revealed his predictions for the West Michigan economy January 26, during the 2017 Colliers Annual West Michigan Economic and Commercial Real Estate Forecast event held at DeVos Place in Grand Rapids.

His survey of the greater Grand Rapids economy (Kent, Ottawa, Muskegon, and Allegan counties) was conducted in November and December of 2016. 

Isely said the local economy will continue to grow in 2017, but at a slower pace. "Employment growth will slow to about 2 percent growth from running at 3, 4 or 5 percent during the last few years," he said. "Sales growth will improve to about 3 percent, but business leaders said while they see sales going up this year, they will need fewer workers to handle it."

Isely said unique challenges for the local economy include the need for skilled labor, growth in the auto and furniture industries hitting a plateau, and strong national policy changes expected from the new administration.

Isely added that construction has been strong for West Michigan, but there will be a shift to single-family from multifamily residential in the upcoming years; he also said he expects the next recession to hit in two-to-three years.

Overall findings for 2017:

• The Current Business Confidence Index for 2016 is 78.3%, a small improvement from 2015; 

• The Forecast Business Confidence Index for 2017 is 80.7%; 

• Employment is expected to grow by 2.0–2.2% in 2017; 

• Overall nominal sales are expected to increase by 2.8–3.2% for 2017; 

• Export growth in 2017 is forecast for continued weakness; expected growth is between 1.6% and 3.6% for 2017;

• All indicators signal the 2017 economy will continue to grow, but the pace, particularly in employment, will be slower than in 2016. 

For more information, contact Paul Isely at (616) 331-7418.