States projected growth rate barely tops 1 percent

July 21, 2012
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The Grand Rapids Business Journal/e-forecasting.com Michigan Leading Economic Indicator, Michigan's early bird of economic activity, increased in May 2012 at a reading of 110.4, where 2,000 is set equal to 100.

The private forecasting service said the composite Michigan index of state leading indicators, which is produced jointly with Grand Rapids Business Journal, went up 0.3 percent in May after also increasing 0.3 percent in April.

Eight of the 10 components that make up Michigan's Leading Indicator had a positive contribution in May: unemployment claims, weekly hours in manufacturing, building permits, new orders (Detroit business), consumer expectations (regional), interest rate spread, productivity barometer (Detroit business) and employment barometer. Two of the 10 components had a negative contribution to Michigan's Leading Indicator in May: exports of manufactures and stock prices (national).

Looking at its six-month growth rate, a signal of turning points, Michigan's Leading Indicator's six-month growth rate came in at 3.6 percent, which showed an improvement from April's reading of 3.4 percent. This compares to a long-term annual growth rate of 1.1 percent, which is the same as the annual growth rate of the state's overall economic activity.

On a more local level, in the city of Grand Rapids, the real GDP is estimated to have averaged $30.236 billion of chained 2005 dollars in the last quarter of available data (January 2011), compared to $32.269 billion five years ago.

In Grand Rapids, mid-quarter estimates of the population in the latest quarter reveal current residents to total 776,000 based on the most recent data available (January 2011). According to those figures, the city's population advanced by 1 percent in the last five years.

City employment, measured by all private and government employees, is estimated to have totaled 355,000 in January 2011. The number of jobs in the city of Grand Rapids went down 6 percent in the last five years.

The average annual pay, as measured by the ratio of all city wages and salaries compared to total employment — also called annual worker’s earnings — is estimated to have totaled $40,403 in January 2011. The city's annual earnings per worker was $39,151 five years ago.

Evangelo Simos is chief economist of consulting and research firm e-forecasting.com. He may be reached at eosimos@e-forecasting.com

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