Employment in Berrien County — the Niles – Benton Harbor MSA — improved by a very healthy 1.6-percent on the strength of employment growth in the private-services sector and the unemployment rate fell to 4.5-percent from 4.8-percent in the 4th quarter of 2015. That’s the good news from the Business Outlook for West Michigan as published today by the W.E. Upjohn Institute for Employment Research.
The bad news from the same report, according to Regional Analyst Brian Pittelko, is that “The area’s economic indicators were mixed, suggesting employment growth may slow going into the next quarter.”
The 22-page quarterly report goes on to say that the figure you see in the photo accompanying this story on Moody on the Market.com shows that employment by place of work experienced a jump in the fourth quarter, following relatively modest growth in the previous quarters of 2015. “Goods-producing employment grew on the strength of gains in construction employment,” as construction picked up 100 jobs, increasing by 5.7-percent. “Manufacturing employment was essentially unchanged, dropping by 0.1-percent, or 20 jobs.” In spite of the losses, manufacturing employment in Berrien County is up by 3.4-percent from the fourth quarter of 2014.
The Berrien County report is a subsection of the full report which details market-by-market the six labor market areas that comprise the West Michigan economy. Across the entire region employment in the 4th quarter increased by 0.6-percent for a gain of nearly 5,200 jobs with at least 680 of those in the Berrien County market.
The composite unemployment rate for the entire region dipped to 3.8-percent in the quarter from the 4-percent rate in the previous quarter. The region’s economic indicators, according to Pittelko, “were negative during the fourth quarter of 2015, suggesting that employment conditions may stall in the coming months.”
In the Battle Creek MSA, service sector losses caused employment to slip while the Grand Rapids-Wyoming MSA saw goods-producing employment driving growth there. In the Holland-Ottawa County MSA, manufacturing gains compensated for losses in both services and government sectors. The Kalamazoo-Portage MSA saw growth across all service-sector industries and the Muskegon-Norton Shores MSA witnessed private-sector gains which, in turn, led to stead job growth in that market.
Overall, West Michigan’s composite 3.8-percent unemployment rate is one of the lowest in the state, matching the rate set in the Lansing area, but 0.5-percent higher than the best performing market in the state, Ann Arbor where the jobless rate stands at 3.3-percent. The Detroit area bears the highest unemployment rate at nearly 6-percent (5.9-percent), a full percentage point above the next highest labor market of Saginaw where it stands at 4.9-percent.
The Upjohn report also captures the latest data from the Retail Activity Index as prepared by the Chicago Federal Reserve Bank in cooperation with the Michigan Retailers Association. That index shows “a drop in retail activity in West Michigan in the 4th quarter. The 12-month moving average shows a marked decline for the first time since late 2012.”
The report also delivers George Erickcek’s Employment Outlook for 2016 and 2017 in West Michigan. Erickcek points out that for all of 2015, employers in West Michigan added 25,600 workers to their payrolls, after adding 20,000 in 2014. He tells us, “Clearly employers are facing tighter labor markets, and there is growing evidence that wages are starting to rise.” He adds, “Growing uncertainty on the national and international fronts, plus possible local labor shortages, could slow employment gains in the region during the next two years.”
Erickcek says, “We would like to think that we learn from our mistakes; however, once again we underestimated the strength of the West Michigan economy.” They were short by 0.6-percent in 2015 and under-predicted growth a year earlier by 1.7-percentage points. So…he is forecasting employment to grow by 2-percent both this year and next, saying “If this forecast holds, 17,200 jobs will be created in 2016 and an additional 17,500 in 2017.
Erickcek pegs a forecast of a 1.4-percent employment gain in Berrien County in 2016 and 1.3-percent hike in 2017. Both of those are compared to the real 1.9-percent gain in the county.
You can see the complete Upjohn report by clicking the link below:
