Economic Development, Human Resources, and Lakeshore

Muskegon economic forecast points to 'increase' in total employment

January 28, 2013
| By Pete Daly |
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Potential investors will tour downtown Muskegon
Downtown Muskegon hosts events such as a stop on the Hot Rod Power Tour, which drew some 50,000 visitors downtown. Photo via Facebook

Muskegon-area manufacturers are doing better than the nation as a whole, according to George Erickcek, senior regional analyst at the W. E. Upjohn Institute for Employment Research.

In making his annual forecast for the Muskegon/Norton Shores MSA, he told a large group at the chamber of commerce breakfast there this morning that he believes total employment will increase by 1.1 percent in 2013 and increase again in 2014 by 1.2 percent.

In 2012, it now appears that total employment there across all sectors declined by 1.1 percent, based on data provided by the federal Bureau of Labor Statistics. However, the BLS had originally predicted total employment would rise 1.3 percent, noted Erickcek, adding he was “suspicious” of the numbers the BLS is providing now and even stating jokingly at the start that he was “not sure” what really happened in the Muskegon MSA in 2012.

At any rate, in 2012 the goods-producing sector — manufacturing — didn’t lose jobs overall in the Muskegon MSA, with an estimated gain now set at 1.1 percent. That compares to an estimated 1.2 percent loss of jobs in the service sector and a 3.5 percent loss in government jobs.

Recent business reports from the Muskegon region “have been pretty robust,” said Erickcek, mentioning in particular manufacturing companies such as ADAC, Port City Group, GE Aviation, Aero Foil and Forming Technologies.

Looking at the three different job sectors in 2013, Erickcek sees manufacturing up 1.5 percent, private service employment up 1.2 percent and government hiring up by 0.2 percent.

In 2014, those estimates are 1 percent, 1.4 percent and 0.3 percent, respectively.

New data just in indicates to Erickcek that overall through 2012, unemployment decreased in the Muskegon MSA and was “falling for the right reasons… People are finding work.”

One factor that lowers the estimated unemployment rate in some Michigan communities is when individuals who have been unemployed for a relatively long period of time finally give up on ever finding another job, and effectively leave the work force. However, that “giving up” factor does not appear to be changing the unemployment estimate in the Muskegon MSA, according to Erickcek.

Wages are “stagnant across skills levels” for full-time production workers in Muskegon, and perhaps “trending downward,” said Erickcek.

Erickcek’s forecast was put on by the Muskegon Lakeshore Chamber of Commerce, which also invited MEDC President Michael Finney to be part of the program.

Finney spoke about how Michigan has become “pretty business friendly” since Gov. Rick Snyder took over, and that “the word is getting out” to business in other states.

Prior to Snyder, Michigan’s taxation of business was “onerous,” he said, but is now a flat tax of 6 percent. He added that with the exception of C corporations, there is effectively no longer a business tax in Michigan, and 100,000 companies in the state are no longer taxed. The Tax Foundation, which once pegged Michigan at 49th in business friendliness among all the states, now places it 12th overall, and he said Michigan is actually more favorable to business now than some of the states frequently touted as such, including Texas, Florida and Pennsylvania.

Finney also spoke at length about the MEDC program that encourages bank lending to businesses that no longer have sufficient collateral, due to the drop in property values. The MEDC will “deposit” in those banks the cash needed to cover the gap in collateral, he said, estimating that perhaps as many as 500 companies have gotten that help and so far, and “zero” have defaulted on the loans they got from those banks.

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