Jump to content

West Michigan/Grand Rapids Economy


GRDadof3

Recommended Posts


This announcement was a big deal:

 

https://news.google.com/news/story?ncl=dw5MG3dZSuhapiM6MVQFs3r5GKR2M&q=tesla+grand+rapids&lr=English&hl=en&sa=X&ei=z65MVaCOO8yfgwSYmIGwDQ&ved=0CCgQqgIwAA

 

Their plants are probably not that large, since their volumes are low. But they are getting into battery technology, which West Michigan has successfully attracted several battery plants.

 

Would be cool to see them build a campus on the old GM plant site in Wyoming. A real "sharp stick in the eye" to GM. 

 

 

 

 

 

Their plant in Fremont California. They'd have a lot more access to a supply base and automotive R&D here than there. 

 

hero@2x.jpg?3

 

 

factory_map_large.jpg

Link to comment
Share on other sites

 

I noticed this in the Google feed - CNBC reporting the penny stock Riviera Tool shooting up 10000% after the Tesla acquisition:

 

http://www.cnbc.com/id/102662082

 

...And then not even 40 minutes ago, the Free Press is reporting all those stocks aren't real, as Riviera ceased to be publicly traded 8 years ago:

 

http://www.freep.com/story/money/cars/2015/05/08/tesla-motors-riviera-tool-penny-stock-finra-trading-halt/26971439/

 

Hilarious!  Hold on to your money, guys.

Link to comment
Share on other sites

Also, hopefully Lansing will do away with that stupid law preventing Teslas from being sold in MI.  You know, stop using laws to hurt a Michigan business, know what I'm saying...?

Tesla just can't sell teslas. They can set up a dealership model to sell their cars here if the choose.

Link to comment
Share on other sites

Michigan was not the first state to put that law into effect.  Their were several states that already had similar laws for the very same reason.  

Texas has that same stupid law which is surprising considering how pro-business Texas is in general.  It's all because of the powerful Automobile Dealers Association lobby that will do anything to protect their outdated business model.

Link to comment
Share on other sites


Texas has that same stupid law which is surprising considering how pro-business Texas is in general.  It's all because of the powerful Automobile Dealers Association lobby that will do anything to protect their outdated business model.

 

Exactly.  All it does is make Michigan look afraid of new business.  It's embarrassing.  Despite all the good news in GR lately, Michigan is still fighting an image that its economy is stuck in the past, and this reinforces it.  Texas doesn't have that problem.

 

But the point is, Tesla is a Michigan business now, so there's no point in the state actively trying to hinder it.

Link to comment
Share on other sites

Exactly.  All it does is make Michigan look afraid of new business.  It's embarrassing.  Despite all the good news in GR lately, Michigan is still fighting an image that its economy is stuck in the past, and this reinforces it.  Texas doesn't have that problem.

 

But the point is, Tesla is a Michigan business now, so there's no point in the state actively trying to hinder it.

Except that traditional auto still out employs tesla 1000-1? Now, if tesla was going to build that $5B giga battery factory in Michigan vs Reno, NV, then they may have had some clout to enact change.

Link to comment
Share on other sites

Well that's an interesting stat:

 

Among Michigan's top 10 counties for jobs growth during that period, two West Michigan counties – Ottawa and Kent – added more jobs than the next eight combined.

 

http://www.mlive.com/politics/index.ssf/2015/05/jobs_flooding_to_west_michigan.html

 

 

Of course the article has to dive into the size comparisons of Oakland County to Kent County, and the economic output comparison of both. "Sorry West Michigan, we won't ever say 'good job!'" - The Rest of Michigan

 

Grand Rapids is becoming the next "Raleigh" of Michigan and people in Southeast Michigan are arguing that they drive bigger cars than us. :) 

Link to comment
Share on other sites

Grand Rapids MSA (old MSA definition) came in 12th place in mid-sized metros in this interesting study done by American Institute for Economic Research, of Employment Destinations for college grads. 

 

Methodology/background:

 

https://www.aier.org/research/top-job-destinations-college-graduates

 

https://www.aier.org/sites/default/files/Files/edi/2015/2015_Grand_Rapids.pdf

 

The study set off a flurry of listicles:

 

http://www.huffingtonpost.com/2015/05/12/best-cities-for-grads_n_7242742.html

Link to comment
Share on other sites

  • 3 weeks later...

April's unemployment hit 3.3%, lowest in 15 years. Employment levels continue to grow at about a 4% rate annually, which is putting Grand Rapids in the 2nd to 10th best metro area for job growth (depending on the source). 

 

http://www.bls.gov/regions/midwest/mi_grandrapids_msa.htm#eag

 

 

http://www.grbj.com/articles/82445-grand-rapids-ranks-no-2-in-us-for-finding-employment

 

I've actually noticed that companies along 131 are erecting signs on their properties saying they are hiring and "looking for talent!" Growing up in Michigan I haven't known what it's like to live in a fast growing jobs market. :)

 

 

THIS is a really awesome data gathering and interactive map of the country's jobs markets, and which MSA's have come out of the recession the strongest, done by the Brookings Institution. Grand Rapids comes in at #10 for post-recession job growth (it had fallen to the 76th spot during the recession). 

 

1. Austin- Round Rock - San Marcos TX

2. Houston - Sugarland - Baytown TX

3. Dallas - Ft Worth - Arlington TX

4. San Antonio - New Braunfills TX

5. Oklahoma City OK

6. Provo - Orem UT

7. Denver - Aurora - Bloomfield CO

8. San Jose - Sunnyvale - Santa Clara CA

9. Nashville - Davidson - Murfreesburo - Franklin TN

10. Grand Rapids - Wyoming MI

11. McAllen - Edinburg - Mission TX

12. Columbus OH

13. El Paso TX

14. Raleigh - Cary NC

15. Salt Lake City UT

 

http://www.brookings.edu/research/interactives/metromonitor#/M24340

(be sure to set the little drop downs on each map at "Recession+Recovery")

Link to comment
Share on other sites


April's unemployment hit 3.3%, lowest in 15 years. Employment levels continue to grow at about a 4% rate annually, which is putting Grand Rapids in the 2nd to 10th best metro area for job growth (depending on the source). 

 

http://www.bls.gov/regions/midwest/mi_grandrapids_msa.htm#eag

 

 

http://www.grbj.com/articles/82445-grand-rapids-ranks-no-2-in-us-for-finding-employment

 

I've actually noticed that companies along 131 are erecting signs on their properties saying they are hiring and "looking for talent!" Growing up in Michigan I haven't known what it's like to live in a fast growing jobs market. :)

 

 

THIS is a really awesome data gathering and interactive map of the country's jobs markets, and which MSA's have come out of the recession the strongest, done by the Brookings Institution. Grand Rapids comes in at #10 for post-recession job growth (it had fallen to the 76th spot during the recession). 

 

1. Austin- Round Rock - San Marcos TX

2. Houston - Sugarland - Baytown TX

3. Dallas - Ft Worth - Arlington TX

4. San Antonio - New Braunfills TX

5. Oklahoma City OK

6. Provo - Orem UT

7. Denver - Aurora - Bloomfield CO

8. San Jose - Sunnyvale - Santa Clara CA

9. Nashville - Davidson - Murfreesburo - Franklin TN

10. Grand Rapids - Wyoming MI

11. McAllen - Edinburg - Mission TX

12. Columbus OH

13. El Paso TX

14. Raleigh - Cary NC

15. Salt Lake City UT

 

http://www.brookings.edu/research/interactives/metromonitor#/M24340

(be sure to set the little drop downs on each map at "Recession+Recovery")

So Jeff-Seeing as how you are in the industry and so am I (somewhat) this data brings to mind several conversations I have been engaged in over the past couple of weeks.  We are seeing housing prices rise at a pretty good clip here in Kent County.  I am repeatedly being asked, "are we headed for another housing bubble?"  My answer has been NO.  Or at least not in the foreseeable future.  Current underwriting criteria, oversight and regulations regarding appraisals, significant lack of inventory, along with a stable and growing economy (as further evidenced by the unemployment numbers) means we are going to see this last for a bit.  Plus I do not see prices going up too high too quick.  That being said I know of a house in a SE side neighborhood that one would have NEVER thought would have value get listed a couple weeks ago for $159,800 and by days end the seller accepted an offer for $25K over asking...so there is that...

Link to comment
Share on other sites

So Jeff-Seeing as how you are in the industry and so am I (somewhat) this data brings to mind several conversations I have been engaged in over the past couple of weeks.  We are seeing housing prices rise at a pretty good clip here in Kent County.  I am repeatedly being asked, "are we headed for another housing bubble?"  My answer has been NO.  Or at least not in the foreseeable future.  Current underwriting criteria, oversight and regulations regarding appraisals, significant lack of inventory, along with a stable and growing economy (as further evidenced by the unemployment numbers) means we are going to see this last for a bit.  Plus I do not see prices going up too high too quick.  That being said I know of a house in a SE side neighborhood that one would have NEVER thought would have value get listed a couple weeks ago for $159,800 and by days end the seller accepted an offer for $25K over asking...so there is that...

 

 

I think some areas may see mini-bubbles, especially areas that are attracting a lot of out-of-state or out-of-town investors. Rapidly rising prices can't go on forever, and they'll correct (houses will begin to stay on the market longer in those areas, or homes will go un-rented).

 

As far as the metro area though, I don't foresee a bubble. New construction activity is still far below where it was in the early 2000's. This is a national trend actually. So demand is outstripping supply in most of the country. If Grand Rapids keeps adding 20,000 jobs a year, that will cause a continuing constricted market. You'll start to see homes being bought and fixed up in areas that haven't seen investment in 50 years. 

 

I know someone who put up a townhouse for sale in Sparta (of all places) at $30,000 over what they paid and they got 7 showings and 5 offers in 3 days. 

 

Construction labor and material charges are rising, and I see builders probably getting away from the fine finishes they've been doing over the last 5 years. Or more "affordable" new home builders cropping up, like Mayberry Homes which is a statewide builder that just entered the market. 

 

We'll probably have a correction in 3 - 5 years but I don't think it will be like 2006 - 2009. Money is still not as free flowing as it was previously.

Link to comment
Share on other sites

  • 2 weeks later...

I take it back,  http://fortune.com/fortune500/2013/nash-finch-company-500/ Nash Finch was #500 exactly in 2013.   Together the two companies have over 7billion in revenue.   Look for Spartan Nash to be in the Fortune 400-500 range in 2015 

 

Just in case anyone was curious, Spartan Nash made the list at 359.  I underestimated it's spot.   GR officially has a fortune 500 presence again.  Of course if Amway, Meijer and Gordon Foods were public it would have 4, as Spartan has less revenue than all 3.

Link to comment
Share on other sites

And bam just like that, GR's MSA employment surpasses Rochester New York's for the first time in history.

 

http://www.bls.gov/regions/midwest/mi_grandrapids_msa.htm#eag

 

538,000 employed and a 4.1% increase over this time last year (a 3.0% annual growth rate is considered "excellent."). 12,000 workers added just in the month of May. 

 

Other peer cities:

 

Omaha, NE 494,600 1.0% growth rate

Birmingham AL: 522,000 2.0% growth rate

Rochester: 536,400, 1.3% growth rate

Grand Rapids: 538,000 4.1% growth rate

New Orleans: 566,000 0.0% growth rate

Raleigh, NC: 575,800 3.0% growth rate

Providence, RI: 583,400 1.8% growth rate

Memphis TN: 621,000 1.0% growth rate

Richmond VA: 636,000 0.4% growth rate

Salt Lake City: 678,000 3.9% growth rate

 

*This is for metro area (MSA), not city of GR

  • Like 2
Link to comment
Share on other sites

That's quite an impressive growth rate.  Year-over-year lists have to be looked at with the proper perspective because they often compare one place coming off a bad year against places that had a high growth rate during the previous year.  But that's not the case this time since Grand Rapids had a good year last year if IIRC.

Link to comment
Share on other sites

That's quite an impressive growth rate.  Year-over-year lists have to be looked at with the proper perspective because they often compare one place coming off a bad year against places that had a high growth rate during the previous year.  But that's not the case this time since Grand Rapids had a good year last year if IIRC.

 

The growth rate has been steadily holding around 2.5 - 3.0% year-over-year, but seems to have accelerated this year. There has been a slew of company expansion announcements this spring so I don't see it slowing down any time soon. 

 

If another 22,000 jobs are added over the next year to May 2016, like this past year, it will put GR at the same size as New Orleans. 

 

The little "dips" are because GR has a lot of seasonal employment, and a large college student population (a lot of college students leave the workforce during school year and return to the workforce over the summer). 

 

What's really interesting is that employment bottomed out in July of 2009 at 437,000 employed, basically 100,000 fewer employed than today. 

 

18802302149_6988c22351_c.jpg

Link to comment
Share on other sites

What gave May such a large bump?   Is it seasonal due to the start of summer?  

 

Also the job growth for the labor market has started to outpace perennial golden children like SLC and Raleigh.  Is this a sign of a changing economy?  Or is this an inflated increase because of the areas still strong manufacturing presence?  When I was in college one of my economics professors said that in good economic times Michigan (and Grand Rapids in particular)  did 5% better than the rest of the country.  In bad economic times it did 5% worse.   That always stuck with me.  What is different now, from when that statistic was put in my brain 15 years ago?   I love this relentless onslaught of economic news but how can we be sure that it's not the same bubble?

Link to comment
Share on other sites

The increases are across the board every sector, the economy has been diversifying for a while.  It's still undeniable that the auto parts supplier base in Grand Rapids has been growing at a breakneck pace.   They have more business than they can handle, and not enough employees to keep up with it.  I don't know what the breakdown of the employment base is currently, but it feels like the auto suppliers have over taken the furniture makers as the silent majority (especially when you add Ottawa County to the labor market).  Even with that growth comes a shortage of educated STEM workers so you can't say it's JUST manufacturing. It would be interesting to see the breakdown of where the majority of those jobs come from.

  • Like 1
Link to comment
Share on other sites

The increases are across the board every sector, the economy has been diversifying for a while.  It's still undeniable that the auto parts supplier base in Grand Rapids has been growing at a breakneck pace.   They have more business than they can handle, and not enough employees to keep up with it.  I don't know what the breakdown of the employment base is currently, but it feels like the auto suppliers have over taken the furniture makers as the silent majority (especially when you add Ottawa County to the labor market).  Even with that growth comes a shortage of educated STEM workers so you can't say it's JUST manufacturing. It would be interesting to see the breakdown of where the majority of those jobs come from.

 

You can look at this table and go right down the sectors and their growth rates:

 

http://www.bls.gov/regions/midwest/mi_grandrapids_msa.htm#eag

 

5000 of that 12,000 jump in May was in manufacturing, but manufacturing is not as large of a sector here. It was 25% of the workforce back in 2000, and is 19.8% today.  

 

Your economics professor had it right in a sense. When manufacturing jobs grow, they have huge multipliers. Every new manufacturing job tends to produce 3 to 4 spinoff jobs. Professional service job growth only has a 1 or 2 multiplier. That historically has helped Michigan and West Michigan. We might be seeing some of that now, yet at the same time, professional services and education and health services are skyrocketing. If you add those two together at 170,000 workers, that's far more now than the 107,000 manufacturing workers. 

 

The Freep picked up the growth story on Friday:

 

http://www.freep.com/story/news/local/michigan/2015/06/20/grand-rapids-economic-growth/29024917/

  • Like 2
Link to comment
Share on other sites

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

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

×
×
  • Create New...

Important Information

By using this site you agree to our Terms of Use and Privacy Policy. We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.