Right Place Program Takes Look Into Future

May 17, 2002
| By Katy Rent |
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GRAND RAPIDS — For the fifth consecutive year the Right Place Program and George Erickcek, senior regional analyst for the W.E. Upjohn Institute, are reflecting on the past and looking into the future to present the economic forecast for West Michigan.

On Thursday, Erickcek will review the 2001 economic situation and then look ahead at his projections for 2002 and 2003 for West Michigan. He also will take a look at national projections and specific industries, comparing how West Michigan has performed relative to similar regions.

“Many people do comparisons wrong because they don’t compare equal territories,” Erickcek said. “You need to look at the economic base of the area and what the community does to further economic growth. It is not going to be a good comparison between, say, Boulder (Colo.) and Grand Rapids or a community that produces furniture with a community that thrives on tourism.”

For the forecast performed this year Erickcek combined different forecasting models to gather information about past trends, future projections and hard fact numbers. From there, The Right Place Program gathered professionals from various industries, including automotive, office furniture, finance, real estate, retail and temporary employment, and created a focus group.

The information Erickcek gathered was presented to the 15 to 20 members of the focus group for their input on what was found and what they had been seeing in their industries.

“It is important to us to present this information to real people because while computers can gather good information, they are only good with numbers, and we want to take a look at what experts involved in those specific fields are experiencing.”

Erickcek said his goal was to take a look at Grand Rapids and other cities with a manufacturing base. “Now the question is, since we have identified the cities with a manufacturing base, which ones are most competitive?” Erickcek said. “We take the top 50 cities and then go a step further to see which cities have firms that are most competitive — not communities, but actual firms — the ones that are doing better than others.”

“While we have a good mix of industries, we do want to stay in the manufacturing arena,” said Birgit Klohs, president of The Right Place Program. “Twenty-eight percent of our labor force is still based in manufacturing, so it is very important to our economic base.”

Klohs added that while she hasn’t seen the projections for the coming years, she believes the manufacturing sector has been experiencing a recession since March.

“I made this comment earlier and while I expect the numbers to be different, I feel we will still feel the effects of this recession into next year,” Klohs said.

Erickcek agrees and poses the larger question of how long a recession will last.

“Currently, Grand Rapids is not in the position it wants to be in. While looking at the core industries of our region, office furniture and automotive, we see that we are driven by our business investments, and in turn we can see that we have experienced a big fallback,” he said. “I think we will see this (recession) last through the fourth quarter of 2002 and possibly into the first quarter of 2003. Given the nature of the national economy and slowdown, we want to take a look at how that will affect Grand Rapids and why Michigan and Grand Rapids will be affected. In our area, we could feel this harder than 1990-91.”

He added that Grand Rapids will see a sluggish turn because of its dependence on the office furniture and automotive manufacturing industries, both of which he expects to rebound slowly

“2002 is not going to be a robust year; however, we may find 2003 to be a different story,” he said. “Specifically in the area of lean manufacturing between 1990 and 1999, we did very well.”

Erickcek will present his findings from 7:30-10:30 a.m., during a continental breakfast at the Amway Grand Plaza Hotel. The event is open to the public and the cost is $25.

“With this report to the community we hope it will allow companies to craft their tactics on how to assist and prepare for the future,” Klohs said. “Every region is different and this information can be used by a variety of different sources.”

Erickeck added that while he hasn’t received feedback from the community regarding how the information is interpreted or used, he does expect it to have a widespread effect. “With the ability and use of the Internet today this information has the ability to reach many people,” he said. “The Right Place Program has in the past posted the findings on their Web site, and this allows one community to view others in relation to its own situation.”

“What we are doing here is taking a wide view and then zooming in, taking a picture of the earth and then zooming in to take a look at Michigan,” Klohs added. “This way local companies can make decisions based on their position in the national economy, and more specifically, its impact on the economic situation in Grand Rapids.”    

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