GVSU team sees mix of data in forecast of Grand Rapids economy

When it comes to predicting the future of the Grand Rapids’ economy for 2024, Grand Valley researchers at the Seidman College of Business are seeing a mix of signals from data they monitor and what local businesses tell them.

Paul Isely, professor of economics and associate dean of the Seidman College of Business, presented the findings from his Grand Rapids Economic Forecast to members of the Grand Rapids Chamber of Commerce during their 136th Annual Meeting at DeVos Place on January 31.

While some data in the research suggests the local economy will slow through the first half of 2024, Isely said there are also several positives to emerge from the report indicating a healthy uptick and strong second half to the year.

Consumer spending will be a key factor in the region’s economy, Isely said. Adjusted for inflation, consumers saw their savings depleted by the end of 2023, requiring their spending to be increasingly debt driven, particularly among young workers.

“During 2023, the U.S. consumer kept us out of recession,” Isely said. “If it weren't for their desire to spend so much money, we would have had a recession.”

Survey respondents said they expect their firms to shrink their headcount and slow employment growth for the coming year. But, data projections also show sales and wages rising, Isely said. 

“We’re looking at growth that’s almost identical to last year,” he said. “We’re looking at 1.5% of employment growth. We’re looking at wage growth just short of 4% and inflation just short of 3%.”

The research shows local businesses had higher confidence in the Grand Rapids economy than expected by the end of 2023, but Isely also added that confidence levels are forecast to wane for the private sector in 2024.

While employers are expressing lower confidence for the private sector, they anticipate strong confidence for the government and nonprofit sectors, citing increased sales tax revenue, strong property values and continued spending from the federal stimulus package.