Business caution signs for the new year
Forecasters are bullish regarding the national economy and the only word to add regarding West Michigan’s economy is “cautiously” bullish. Year-end Business Journal reporting in most business sectors shows confidence in the local economy. The Business Journal notes, too, that Q4 brought some significant changes to local and regional businesses which will, as a result, begin to shape and change business leadership and create a new dynamic in competitiveness. Regardless of business type, the Achilles’ heel of the local economy (state and national) is the lack of a trained or skilled workforce.
Brian G. Long, director of supply management research at Grand Valley State University Seidman College of Business, noted a “growing list of shortages” in inventories but anticipates an “influx in investment especially from foreign firms already located in Michigan.” He also noted increases in employment to date have contributed to the housing shortages. Census updates show Ottawa County had a 20 percent employment increase over the past 10 years; Kent County employment increased 15 percent. The rate for the nation was 5.4 percent. Area title company owners expect those increases and continued low-interest rates will seed modest growth. Expectations are suburban locations will exceed the central city. The new federal tax code changes, however, are expected to impact home buying/ownership by year-end.
Benjamin VanDerWeide, SBA senior product specialist at Huntington Bank, told the Business Journal the uptick in SBA loans has been a direct result of the increase in manufacturing acquisitions. He also notes, “More small business owners are ready to take on risks, such as construction projects, buying new buildings or acquiring other businesses. A lot of businesses in the next five to 10 years will be coming up for sale with retirements.”
Significant year-end changes affected the region’s largest employment base — health care. New leadership has emerged for 2018. The Blodgett and Butterworth hospital merger in 1997 created Spectrum Health, now the largest employer in West Michigan and one with significant tentacles in all of western Michigan. In 2017, Metro Health and University of Michigan Health System cemented its partnership, and at year-end, Mercy Health and Saint Joseph Mercy Health Systems are merging to form a new statewide health network. Both systems are owned by Trinity Health. Both Mercy Health and SJMHS will retain their current names and campus locations. The new affiliation was set to be effective Jan. 1, 2018.
Confidence in the greater Grand Rapids economy is strong but should be tempered with caution.