Recession Predicted for Grand Rapids in 2 – 3 Years, Slow Growth in 2017
Grand Valley State University economist Paul Isely is predicting slow steady growth for the greater Grand Rapids economy in 2017. He also expects the next recession to hit West Michigan in two to three years.
Isely revealed his predictions for West Michigan's economy this morning at the 2017 Colliers Annual West Michigan Economic and Commercial Real Estate Forecast event held at DeVos Place in Grand Rapids.
His predictions are supported by a survey of the greater Grand Rapids economy (Kent, Ottawa, Muskegon, and Allegan counties) which was conducted in November and December of 2016.
Isely said, "Employment growth will slow to about 2 percent growth from running at 3, 4 or 5 percent during the last few years. 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."
A recession is expected in the next two-to-three years as the US economy approaches the potential peak of GDP in the next 18 months. That would indicate the maximum level of output that can be sustained for a long period of time. Historically, that means a recession will follow in two to three years.
Isely said challenges for the greater Grand Rapids economy include:
- The need for skilled labor.
- Growth in the auto and furniture industries hitting a plateau.
- 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.
Employment is expected to grow by 2.0–2.2% in 2017.