While most signs point to continued employment growth in Michigan, there are a few headwinds that could limit future growth until capacity constraints are eased. That’s one major assessment of the Michigan economy as delivered in the June Business Outlook for West Michigan as detailed by the W.E. Upjohn Institute for Employment Research.
The constraints mentioned in the latest report include the fact that “the statewide multiplier for the auto industry has fallen from 4.2 in 2007 to 2.8 in 2013. That means that even if the auto industry could grow at the pace it did in the 1990s, it would have a third less impact on the rest of Michigan’s economy.” Another factor is the ongoing shortage of talented workers. The report says, “As manufacturing jobs approach pre-recession levels in some sectors, demand is increasing for workers with requisite skills.”
The Michigan viewpoint delivered by the Upjohn Institute is that “Michigan’s economy, as measured by employment growth, has been chugging along at a pretty good clip for most of the expansion,” however the question is asked, “Can it continue to grow, or are there impediments in the way.”
Looking specifically at the auto industry, the report shows the forecast for autos “has dipped slightly in the past couple of months, but forecasters are still predicting that sales will continue to gain ground in 2016, as auto sales have done in recent years.”
During the first quarter of 2016, employment in the five metropolitan areas of West Michigan, including the Niles-Benton Harbor MSA increased by 0.8-percent, a gain of nearly 7,000 jobs. Employment gains were reported in the area’s goods-producing and private service-providing, and government sectors.
Narrowing things to the Berrien County market, the Upjohn folks tell us, “Total employment improved b y 0.8-percent in the Niles-Benton Harbor area during the first quarter. Employment in the area’s goods-producing sector improved by 0.5-percent over the quarter. Service-providing employers increased by 0.7-percent and government employment improved by 1.9-percent.” The report also says, “The area’s unemployment rate increased to 4.5-percent from 4.2-percent in the previous quarter,” and, “Local economic indicators were mixed during the quarter, suggesting that economic conditions may be flat in the coming months.”
In a sidebar, the report says “The rate of new dwelling units put under contract for construction increased by 60.4-percent.” That figure was higher than any other labor market in all of West Michigan, and is substantially higher than the region-wide construction increase of 38.2-percent.
You can see the full report from the W.E. Upjohn Institute for Employment Research by clicking the link below:
