Greater Grand Rapids 2021 economic development successes and 2022 predictions offered at 25th annual Economic Outlook event
More than 330 people viewed a webinar this morning hosted by West Michigan economic development agency The Right Place, Inc. where an outlook on the 2022 economy was shared and a review of 2021 successes was offered. Presentation slides and images are attached. Highlights from presentations are listed below.
In general, the regional economy is expected to grow in 2022, slowing a little after the second quarter of the year. 2022 will see a decline in the inflation rate, although at a slow pacer. Interest rates will be going up. Unemployment rates will decline (reaching 2019 levels). Overall, for the state and region, we should see a solid 2022.
GRAND RAPIDS, MICH. (Dec. 9, 2021) – Today, regional economic development organization The Right Place, Inc. hosted its 25th annual Economic Outlook. The virtual event featured a year-in-review and state-of-the-region presentation by The Right Place, Inc. President and CEO Randy Thelen as well as an in-depth economic analysis and forecast for 2022 by University of Michigan Regional Economic Specialist Don Grimes.
2021 Right Place Accomplishments
The Right Place’s Randy Thelen provided an update on progress against its 3-year strategic plan goals. As it winds down the second year of the plan, which runs from 2020 to 2022, the organization is currently on track to exceed all its goals for the plan.
(click here to read the full strategic plan)
In 2021, the organization’s work has resulted in:
- 1,541 new and retained jobs
- $184m in new and retained payroll
- $286m in new capital investment
Since the start of the plan in 2020, the organization’s work has resulted in:
- 2,494 new and retained jobs (against 3-year goal of 3,400; 74% completed)
- $127m in new and retained payroll (against 3-year goal of $184m; 69% completed)
- $397m in new capital investment (against 3-year goal of $500m; 79% completed)
The organization met with 422 businesses in 2021. Overall, business leaders reported strong confidence in the local economy. Notably:
- 79% reported increasing sales
- 63% reported plans to expand
- 59% reported recruiting challenges
- 52% are planning to increase investment in training
- 94% said the region’s business competitiveness was “very good” or “good”
2022 Outlook Summary
During his presentation, Don Grimes provided a summary of his 2022 forecast, which included the following notable takeaways:
- US Gross Domestic Product in the third quarter of this year was 1.4 percent higher than the pre-pandemic peak in the fourth quarter of 2019.
- The unemployment rate in the U.S. (4.2 percent in November) is less than 1 percentage point higher than the pre-pandemic low.
- In Michigan (6.1 percent in October) the unemployment rate is a little over 2 percentage points higher than the pre-pandemic low.
- Keep in mind, however, that the pre-pandemic unemployment rate in the U.S. was the lowest since 1969. In fact, the U.S. unemployment rate today is lower than it was in any month between March 1970 and February 1999, and for any month between March 2001 and August 2017. Therefore, the U.S. unemployment rate today is very low by historical standards. The unemployment rate in Michigan is also low by historical standards, but monthly levels below the current value are not as rare.
- Real disposable personal income per capita in the U.S. in October was 1.7 percent higher than it was before the pandemic in February 2020.
- The average net worth of American households, adjusted for inflation, increased 17.5 percent from the fourth quarter of 2019 to the second quarter of 2021. This increase was widely shared, the percentage increase in the net worth of the poorest 50 percent of households was greater than for the richest 1 percent of households, although in dollar terms the increase in net worth was much less for poorer households.
- Where the economy is falling short is in the number of jobs and the number of people in the labor force. In the U.S., there are 2.6 percent fewer jobs today than there were in February 2020 and in Michigan there are 5.1 percent fewer jobs than in February 2020. The unemployment rate would be much higher except for the fact that many of the formerly employed workers have dropped out of the labor force, which is down by 1.5 percent in the U.S. and 3.4 percent in Michigan since February 2020.
- The imbalance between demand, which is higher than before the pandemic, and supply, especially labor supply, which is lower than it was before the pandemic is generating increases in prices. Consumer prices in the U.S. were 6.2 percent higher in October than a year earlier and prices in Michigan, measured by the Detroit CPI, are 5.5 percent higher than a year ago.
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About Don Grimes
https://lsa.umich.edu/econ/people/rsqe/donald-grimes.html
About Randy Thelen
https://www.rightplace.org/about-us/our-team/randy-thelen
Thank you to our Sponsors!
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About The Right Place, Inc.
The Right Place, Inc., is a regional nonprofit founded in 1985 and supported through investments from the private and public sector. The Right Place drives current and long-term economic prosperity in West Michigan through the development and implementation of comprehensive strategies to retain, expand and attract businesses. This includes connecting area businesses to national and international resources, identifying emerging growth opportunities, strengthening the competitiveness of area firms, and marketing the region globally. The International Economic Development Council has designated The Right Place as an Accredited Economic Development Organization (AEDO). Find out more by visiting www.rightplace.org, liking us on facebook.com, and following us on twitter @TheRightPlaceGR.
