Muskegon In Better Shape To Weather Recession

March 25, 2002
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MUSKEGON — A diverse manufacturing base, coupled with a continued retail buildup surrounding the Lakes Mall that’s creating new service-sector jobs, will enable Muskegon County to fare a little better in 2002 than other communities in West Michigan, according to a new economic outlook.

While Muskegon County’s unemployment rate will rise during the first half of the year, the growth in service-sector employment will help to offset a decline in manufacturing jobs, resulting in a slight 0.5 percent increase in total employment in Muskegon County throughout all of 2002 and another 2 percent increase in 2003, said George Erickcek of the Kalamazoo-based Upjohn Institute for Employment Research.

That compares with an employment growth rate of 1.8 percent for Muskegon County in 2001.

“It’s going to be a lackluster year, but I think we’re going to stay above water,” Erickcek said after presenting his annual economic outlook to the Muskegon Area Chamber of Commerce’s monthly Early Bird Breakfast on Jan. 25.

By comparison, Erickcek is forecasting a 0.4 percent decline in overall employment for the Holland-Zeeland area in 2002. The broader Grand Rapids-Holland-Muskegon region will see a 0.4 percent increase in total employment this year and a 1.9 percent increase in 2003, Erickcek predicts.

Muskegon County’s economy will fare better comparably because it is not nearly as reliant on the office furniture industry, which is presently mired in its worst-ever sales downturn, as is neighboring Kent and Ottawa counties. The Upjohn Institute estimates that the broader region lost 14.8 percent of its manufacturing jobs connected to the office furniture industry from November 2000 to November 2001, or about 3,900 jobs — and that doesn’t include the thousands of temporary production positions that were the first to go more than a year ago.

The goods-producing sector in Muskegon County, after growing a mere 0.2 percent in 2001, will experience a 1.8 percent decline in employment this year and a 2.7 percent increase in 2003 as the economy rebounds, according to Erickson’s forecast.

The outlook for Muskegon County is in contrast to what’s occurred in past recessions, when the local economy tended to fall further than other communities in a West Michigan statistical area that also includes Kent, Ottawa and Allegan counties.

“Unlike other recessions, of the four counties, Muskegon is going to come out better,” Erickcek said.

Keeping Muskegon County above water in employment growth is an expected increase in service-sector jobs.

Service-producing employment will increase 1.8 percent this year, the same rate at which it grew in 2001, and see another 2.1 percent growth rate on 2003, Erickcek said. He attributes about half of the service-sector employment growth to the Lakes Mall at Harvey Road and Sternberg Road that opened last fall, as well as the surrounding spin-off retail development it’s generating.

Pushing that spin-off development is the retention of the retail dollar in Muskegon County as a result of the Lakes Mall. That’s money that was previously spent in Grand Rapids or Holland and is now staying home, helping to build service-sector employment even during a recession.

“Many of you aren’t going as far to do your shopping, and that’s good news,” Erickcek said.

While the 2002 economic outlook for Muskegon County holds comparatively good news, there are some concerns.

The county’s unemployment rate will increase in 2002 from 2001. The state says Muskegon’s unemployment rate was 6.5 percent for the year and 7.5 percent in December alone.

Erickcek sees an annual 7.1 percent rate for 2002, with the highest monthly rates coming in the first half of the year, and a 5.8 percent rate in 2003.  

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