Area struggling more than most in region
(Editor’s note: This is the final installment of a two-part series.)
Although the Great Recession has hit the Great Lakes Region harder than others in the nation, some metropolitan areas in the multi-state region have showed signs of an economic rebound.
But Grand Rapids-Wyoming is not among those areas — at least not at the two-year mark of the country’s worst economic downturn in seven decades.
A report from the Brookings Institution through its Great Lakes Monitor, which analyzes economic data for the region, revealed that the recession’s overall impact on the 21 largest metro areas in the Great Lakes Region is varied.
Madison, Wis., and three cities in upstate New York — Buffalo, Rochester and Syracuse — are listed among the 20 “strongest performers” in the nation and are recovering nicely. But Grand Rapids-Wyoming, Detroit and Youngstown, Ohio, are on the “worst performing” list.
The report compared the 21 Great Lakes cities across four key economic indicators: the percent change in employment from 2004 to the end of 2009, which marked the two-year anniversary of the start of the Great Recession; the percent change in the unemployment rate from December 2008 to December 2009; the percent change in the Gross Metropolitan Product from 2004 to the end of 2009; and the percent change in the House Price Index from the fourth quarter of 2008 to the fourth quarter of 2009.
Employment, the Gross Metropolitan Product and the House Price index all fell further in Grand Rapids than in the majority of cities in the region, while its unemployment rate rose higher than in all but five of the other metro areas. Those numbers put Grand Rapids in the bottom quarter of the region’s metro areas. Of the 21 areas, the Great Lakes Monitor ranked Grand Rapids-Wyoming:
- 15th in employment change at -6.9 percent, higher than the average of -5.4 percent.
- 16th in the rise of unemployment at 3.2 percent, higher than the average of 2.6 percent.
- 14th in the drop of the GMP at -3.4 percent, higher than the average of -2.1 percent.
- 18th in the fall of the HPI at -8.0 percent, higher than the average of -6.3 percent.
There was some good news for Grand Rapids-Wyoming in the report: The GMP in all of the 21 cities grew between the third and fourth quarters of 2009.
Still, Grand Rapids-Wyoming was one of eight metro areas in the region with a double-digit unemployment rate in December. The report noted that six of those eight areas, including Grand Rapids areas, had a “high degree of specialization in automobile and auto parts production,” and their unemployment rates reflected “the massive job losses in that sector.”
In addition, foreclosures also hit the Great Lakes Region harder than other sectors. Six cities in the region, including Grand Rapids-Wyoming, had rates of “Real Estate-Owned” properties that exceeded the national average. The report said the problem involving those properties — defined as foreclosures that didn’t sell at auction — was “particularly severe” in Detroit, Minneapolis and Grand Rapids.
The report said the current recession, which began in December 2007, has been harder on the Great Lakes Region than the slumps that occurred in 2001, 1990 and 1981.
The Great Lakes Monitor includes Illinois, Indiana, Iowa, Kentucky, Michigan, Minnesota, Missouri, Ohio, West Virginia, Wisconsin, western New York and western Pennsylvania in its Great Lakes Region. The current recession is the nation’s 11th since 1948 and the longest in recent history. The 1973 and 1981 recessions each lasted 16 months. The one in 1990 lasted eight months, while the Great Recession is in its 27th month.