Employment rate predicted to dip by 2.4 percent in 2009

December 11, 2008
| By Pete Daly |
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Employment in the Grand Rapids/Wyoming metropolitan statistical area is predicted to decrease by about 2.4 percent in 2009, according to a 2009-2010 forecast released this morning by George Erickcek, senior regional analyst of the Upjohn Institute.

The Grand Rapids/Wyoming MSA includes Kent, Newaygo, Ionia and Berry counties.

Erickcek, who was speaking at the West Michigan 2009-2010 Economic Outlook presented at the Amway Grand Plaza in Grand Rapids by The Right Place,Inc., said he expects regional employment to increase again by about 0.4 percent in 2010.

Jobs in manufacturing and construction are predicted to drop 8 percent in 2009, which Erickcek told the Business Journal is "a large decline, similar to what we experienced in 1981, 1982."

He attributed much of the decline to the still-unresolved "credit crunch," which "makes it very difficult for business to find the money to improve their furniture holdings if they wanted to, so we share BIFMA's assessment that the furniture industry will experience decline in 2009," he said.

The serious decline in auto sales is another major factor affecting employment. Erickcek noted that in the last recession in 2001, auto sales were not impacted.

"We expect consumer spending to be down for at least half of 2009. That will mean that consumers will postpone what they can… Unfortunately, one thing they can postpone will be (purchase of) automobiles," he said.

He said the only segment within the manufacturing employment statistics that is expected to show a gain in employment in 2009 is in food processing.

The service industries are predicted to see a 1 percent drop in employment in 2009, but that may reverse in 2010 for a gain of 0.9 percent.

Birgit Klohs, president and CEO of The Right Place, reported there is reason for hope in new economic development. She said there was $70 million in capital investment in the greater Grand Rapids area in 2008, the largest amount of annual new investment in the past five years. That investment is said to represent about 1,600 new or retained jobs, with a payroll of $76 million.

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