With a nationwide recession predicted later this year, the Grand Rapids area will escape relatively unscathed—that was the overall theme Wednesday morning as economists made their predictions about the upcoming year.
Expect the West Michigan economy to continue to slow in 2023 as inflation and interest rates increase, however, the Grand Rapids area will still grow at twice the rate of the national economy.
That’s according to Grand Valley State University’s Seidman College of Business Associate Dean Paul Isely, and Associate Professor Kuhelika De, speaking here at the 2023 Grand Rapids Economic Forecast Wednesday morning.
“Employment has already bounced back to pre-pandemic levels, housing is going strong, the question is, why,” De said.
Dr. Isley says, Grand Rapids will keep its head above recessional waters based on three factors. One, the region’s demographic is largely made up of professionals in their 30’s.
And the other two?
“We are going to see continued growth in the housing market, it may dip some, but it won’t crash, and we are going to see a strong automotive industry. Those are great places to be.”
Isley says, while the median cost of housing is dropping nationwide, in Grand Rapids, that hasn’t happened, because there are so many young people who need and want new homes. Buyers are just settling for a smaller house rather than moving out of the area for cheaper real-estate.
Meanwhile, Isley says one unique aspect of the economic situation in the year ahead will be to watch how consumer spending shifts-- noting that the bottom 50 percent of the population by wealth saw its net worth increase by 140 percent from the start of the pandemic.
