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West Michigan/Grand Rapids Economy


GRDadof3

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Joel Kotkin definitely has a hardon for Grand Rapids.     It's good to see GR on a list like that. 

 

Agreed.  Good publicity!  But I'm a little incredulous - 92.7% increase in college-educated population since 2000?  The college-educated population almost doubled in less than 15 years?  That's just unbelievable.

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The Grand Rapids - Wyoming MSA latest employment stats came out and the area continues to boom (not really any other way to describe it). 15,000 more non-farm jobs since this time last year and 75,000 new jobs since the job market crash/bottom in July 2009.

 

On NPR yesterday they talked about economic estimates of national economic growth next year of 2.6% and 3.3% growth in 2016. With no signs of a housing bubble (homebuilding is still way below the peak years across the country), let's hope this current expansion continues for a while.

 

 

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Do you have a link to that Excel sheet? This would be interesting to graph against other trends.

 

 

Sure, here's the chart on BLS with a link to the xls file:

 

http://data.bls.gov/timeseries/SMU26243400000000001?data_tool=XGtable

 

 

Earnings are finally on the rise as well. They had declined through the beginning of 2013:

 

http://research.stlouisfed.org/fred2/series/SMU26243400500000003

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Interesting to see how wages rose while employment declined when the two are graphed together.

 

png&chart_type=line&recession_bars=on&lo

 

 

That is an interesting comparison. Wages are a "lagging indicator," which explains why they don't follow the curve of employment decline/growth.

 

http://www.moneycrashers.com/leading-lagging-economic-indicators/

 

A lot of people think that wages have generally not grown much because of the spike in 1099/independent contractor employment.

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  • 2 weeks later...

Figures are in for October employment rates and Grand Rapids - Wyoming had a scorching 4% growth over this time last year (15,000 new jobs), continuing its ascension upward. Unemployment hit 4.7%, the lowest it's been since....wait for it....2001. If it continues at this growth rate, by 2020 the workforce will surpass 500,000, putting it larger than Rochester NY, Birmingham, AL and Omaha, NE (all of which are stagnating or not growing nearly as fast).

 

So 66,000 more people are on company payroll than this time in 2009. Staggering.

 

Since workforce is usually about half your population, that would grow the metro to about 1 Million (not including Holland/Grand Haven).

 

15788484048_772de4b6f9_o.jpg

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organsnyder, on 20 Nov 2014 - 1:35 PM, said:

This. A well-developed muni broadband system would pay many more development dividends than any road project. We all know how abysmal residential broadband service offerings are, but in many areas of the city, Comcast Business is the only viable option for business connectivity (unless you want to pay hundreds per month for a 1.5mbps T1). We've been able to coast by so far because it's this bad in most of the country; but as more communities get muni broadband, Google Fiber—hell, even FiOS—we're going to be much less competitive.

 

A wrinkle in the whole broadband discussion is cell data.  For some (mostly residential) its become an alternative to traditional home internet as coverage and speed improves while Comcast/Charter/DSL gets more expensive.  Last month near Metro Hospital in Wyoming I was pulling 40 Mbps down, 24 up with T-Mobile.  Through a good part of town I'm getting anywhere between 9 and 40.  Tethering caps certainly need to be factored but I see the typical home user being content with a 10 Mbps connection.  Business of course is another story but fiber needs a residential component to be attractive and saleable. 

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Tethering caps certainly need to be factored

 

That's too important for just a brief mention. HD streaming video eats through a typical wireless cap in a manner of hours. Almost half of U.S. households subscribe to a streaming video service. Many households no longer subscribe to cable TV, and that number is growing.

 

The fact that cellular data would even be viable speaks to the abysmal state of the wired broadband industry.

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That's too important for just a brief mention. HD streaming video eats through a typical wireless cap in a manner of hours. Almost half of U.S. households subscribe to a streaming video service. Many households no longer subscribe to cable TV, and that number is growing.

 

The fact that cellular data would even be viable speaks to the abysmal state of the wired broadband industry.

 

I think you guys are in the wrong thread..

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organsnyder, on 08 Dec 2014 - 3:44 PM, said:

 

That's too important for just a brief mention. HD streaming video eats through a typical wireless cap in a manner of hours. Almost half of U.S. households subscribe to a streaming video service. Many households no longer subscribe to cable TV, and that number is growing.

 

The fact that cellular data would even be viable speaks to the abysmal state of the wired broadband industry.

 

While there's a bunch who stream, the link doesn't disclose what kind of stream, HD or otherwise.  SD streams are what, 500 - 700 MB for a 90 minute show?  Perfectly acceptable on laptops and smartphones, not bad on smaller flat screens.  With some cell services down to $60/mth for 10 Gb that's a good number of streams per month for those watching their data caps.  Besides, who really needs a 1 gigabit connection for Netflix at the cost they will be charging for that lovely internet connection ?  The fact is 10 Mbps works pretty well. 

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Kent County has now essentially reached what economists call "full employment," with the unemployment rate hitting 4.0% in the latest data, lowest in the State. At Tuesday's Right Place - West Michigan Economic Outlook event, George Erickek of the Upjohn Institute will apparently address this issue, because employment growth in the area is now outstripping population growth, creating what could become a major skilled workforce challenge. Anecdotally I know of several companies in the area that are turning away work or not bidding for work because they don't have the people.

 

http://www.mlive.com/business/west-michigan/index.ssf/2014/12/see_which_west_michigan_county.html

 

The other issue Erickek will address is the low wages prevalent in West Michigan (almost 20% below the state average).

 

So many people signed up for this year's event that it had to be moved from the Amway Grand to the JW Marriott:

 

http://www.rightplace.org/News-Events/Event-Calendar/2015-Economic-Outlook-for-West-Michigan.aspx#detail

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The other issue Erickek will address is the low wages prevalent in West Michigan (almost 20% below the state average).

 

 

 

Perhaps he could also address the embedded provincial hiring mindset that is still prevalent around even the largest companies in west Michigan.  As in, "I see you have won awards and been very successful in your work in industry X.  Well, we are in industry Y and unless you've worked in our industry you just couldn't possibly understand how to be successful doing the same job at our company."

Edited by wingbert
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Perhaps he could also address the embedded provincial hiring mindset that is still prevalent around even the largest companies in west Michigan.  As in, "I see you have won awards and been very successful in your work in industry X.  Well, we are in industry Y and unless you've worked in our industry you just couldn't possibly understand how to be successful doing the same job at our company."

Most people who change fields run into that obstacle and hear those exact words, especially if he/she has few connections. That's not unique to West Michigan.

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Perhaps he could also address the embedded provincial hiring mindset that is still prevalent around even the largest companies in west Michigan.  As in, "I see you have won awards and been very successful in your work in industry X.  Well, we are in industry Y and unless you've worked in our industry you just couldn't possibly understand how to be successful doing the same job at our company."

 

I know specifically that the large healthcare organizations in the area have gotten better about that. They're running so low on good candidates that they'll take people who have never worked in healthcare for a lot of their administrative/marketing/management functions.

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I know specifically that the large healthcare organizations in the area have gotten better about that. They're running so low on good candidates that they'll take people who have never worked in healthcare for a lot of their administrative/marketing/management functions.

 

 

Also recruiters are going hard outside of the region, and offering compensation packages a good deal above what would be considered the regional norm. 

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As if the GR - Wyoming economy wanted to out-do itself, November numbers are coming in and non-farm payroll is a whole 18,000 jobs above November last year. Almost 60,000 new jobs since the recession bottomed out. In raw jobs that's a faster growth rate than boomtowns Raleigh-Durham or Austin, TX.

 

 

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That's really good news.  Things are starting to look up for the entire country instead of just the usual suspects. 

 

Definitely a healthy national economy helps us here. Michigan is still the automotive capital of the world bar none, and when more people buy cars...

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  • 5 weeks later...

This is interesting. Grand Rapids - Wyoming MSA had the 9th fastest growing economy in the U.S. last year and jumped up to 69th in Brookings rankings of world cities for economic performance (Detroit was 237th, for comparison). Other cities close to GR-Wyoming in rank were Dallas (!), Oklahoma City, San Jose and Orlando.

 

Paul Isely at GVSU though says our growth may slow as we reach "full employment," as labor shortages will stifle employment growth and business expansions. Does West Michigan have the ability to draw 10 - 15,000 people here a year to keep that momentum going, like warmer metro areas do? In 2013, the net domestic migration was about 1790, so it'd have to go up tenfold to reach 17,000. It's about what Raleigh - Cary NC is drawing now (far right column).

 

http://www.mlive.com/business/west-michigan/index.ssf/2015/01/among_world_cities_grand_rapid.html?ath=1a90132b90933db8002100e5723c045a#cmpid=nsltr_stryheadline

 

We also may run into issues with housing shortages. In the city, projects take years to get designed and built, and vacant land is becoming scarce. Even in fast growing townships like Byron, Gaines, Caledonia and Ottawa County where many transferees here end up, the supply of development projects is drying up as many of the developers retired or got out of the game during the crash.

 

Time to start getting really creative.

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I read this morning's article with great interest as well.  The labor shortage is very real.  Employers with what would be considered low skill entry level jobs available are having a difficult time finding employees.  Employers that require skilled labor are hurting big time.  Right now the KCLBA has 3 $90K renovation jobs we need to bid out and we literally cannot find contractors to bid.  Or if they do bid the need the work so little that their pricing is 10-15% higher so that it makes it "worth their while" if they actually get the job.  

 

From a labor shortage perspective we need to think WAY outside the box if we are going to be able to capitalize on the economic opportunity our region is looking at.  

 

From a housing perspective the KCLBA has quite a few buildable SFH lots for sale in  Grand Rapids and we are creating more and more with our MSHDA Demo grant.  We are seeing quite a bit of interest in our lots.  The SE side is still moving slowly.  It won't be long and I believe we will see a run on houses in substandard condition because it is starting to make economic sense to renovate and either move in or sell.  I know of one landlord that has about 90 homes in this condition and he has been approached by several investors to sell his whole lot.  90% of his homes are in this condition.  The investors are looking to renovate and flip these homes which are some of the most substandard rental homes in their specific locations.

 

I agree in the surrounding area I am not hearing of too many new developments being started.  In fact the KCLBA had a builder in our office the other day who builds large high end Parade of Homes houses.  He has decided that he can make more money buying properties in GR, renovating and flipping.  That's a pretty bold statement.

 

The times they are a changing...and changing fast.

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I read this morning's article with great interest as well.  The labor shortage is very real.  Employers with what would be considered low skill entry level jobs available are having a difficult time finding employees.  Employers that require skilled labor are hurting big time.  Right now the KCLBA has 3 $90K renovation jobs we need to bid out and we literally cannot find contractors to bid.  Or if they do bid the need the work so little that their pricing is 10-15% higher so that it makes it "worth their while" if they actually get the job.  

 

From a labor shortage perspective we need to think WAY outside the box if we are going to be able to capitalize on the economic opportunity our region is looking at.  

 

From a housing perspective the KCLBA has quite a few buildable SFH lots for sale in  Grand Rapids and we are creating more and more with our MSHDA Demo grant.  We are seeing quite a bit of interest in our lots.  The SE side is still moving slowly.  It won't be long and I believe we will see a run on houses in substandard condition because it is starting to make economic sense to renovate and either move in or sell.  I know of one landlord that has about 90 homes in this condition and he has been approached by several investors to sell his whole lot.  90% of his homes are in this condition.  The investors are looking to renovate and flip these homes which are some of the most substandard rental homes in their specific locations.

 

I agree in the surrounding area I am not hearing of too many new developments being started.  In fact the KCLBA had a builder in our office the other day who builds large high end Parade of Homes houses.  He has decided that he can make more money buying properties in GR, renovating and flipping.  That's a pretty bold statement.

 

The times they are a changing...and changing fast.

 

There's a reason why people are buying homes in EGR and doing tear downs. :)

 

If you're a higher end manager, exec or doctor moving here, looking in the $500 - $700,000 range, there ain't much available that doesn't need a lot of work. If you want to build in the Forest Hills area, there are no lots left of any real value. In Ada Township and Grand Rapids Township, there are 0 development projects in the works. I know of one that might start way out in Ada Township near Vergennes, but it's way out there. There's one project that may start in Cascade Twp this year and the lots will most likely start at $150,000, only 15 or 18 lots. That may make people celebrate (that suburban development may slow) but it really crimps the ability to draw execs here, if they want top ranked schools.

 

Most of the developments that went bankrupt and were seized by banks (Macatawa took a bunch back) have pretty much all come back and are now sold out.

 

It may drive investment inward but there's still a lot of gaps in supply. GR may become like Ann Arbor, priced really high for what you get.

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So then how do we get the word out that contractors and other trades that come with them are in serious demand here?  

Do you think Nationally people still see the "Michigan" attached to Grand Rapids and just assume that there is less opportunity in the area?

 

It sounds like Grand Rapids needs workers at all levels to move to the region.  So I wonder just how fast the population is actually increasing.  Clearly there is a demand and people are moving here.   The past few months have seen housing development projects especially within the city announced at a rate of 200-500 new units  a month. Does Pulte not re-enter the market because they don't have the labor resources to build large scale developments? Or is Metro GR simply just not considered favorable for the big time home builders? 

 

Would it serve the regional development think tanks like Right Place to put out some kind of advertising campaign about the need for labor?   I assume it hasn't hit a point where it's so critical that we are losing new opportunities because there's no labor pool left.   The good news seems to come daily.

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  • GRDadof3 changed the title to West Michigan/Grand Rapids Economy

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