West Michigan’s economy is in the midst of a manufacturing recession. The details were revealed during Thursday’s 2020 Colliers Annual Economic and Commercial Real Estate Forecast was held at DeVos Place.
Both the U.S. and Michigan’s manufacturing sector are in recession.
“Right now, as we stand here in the United States and in West Michigan, have a sectoral recession happening in a part of the economy that is 20% to 25% of Michigan.”
Dr. Paul Isely is professor of economics and associate dean in the Seidman College of Business at Grand Valley State University releasing his annual economic survey.
“The probability of a recession bleeding out into the rest of the economy continues to grow and as we see pessimism from our business leaders that we're seeing them talk about slowing their employment growth that really starts to create the probability we can see a recession that more people feel.”
When does Isely expect something like that to happen?
“You know, we told people near the end of 19 beginning of 20 we would start to see a limited recession in some sectors and that's what we're seeing right now. There's a lot of disagreement how that will play out over the course of the next year so it's not perfectly clear. But we can say you should expect that it will continue to slow as we go through the year. It’ll be a little harder to find that next job if you quit your job. It will be a little bit harder to make a buck if your business owner and that would result in, by the time we reach the end of the year, you not feeling quite as happy as you do today.”
From here on out; best case scenario, worst-case scenario?
“Best case scenario is that we find a way to draw in new workers into West Michigan and can grow again. Without more workers we can't. Worst case scenario we don't find a way to draw new workers into West Michigan and we'll start to see this recession sort of bleed out into the rest of the economy and that will look a little bit like 2001.”
We asked Isely to remind us of what happened in 2001.
“2001 was really a one to two percentage point change in unemployment compared to what you saw in the last recession which took us way up. This would put unemployment, you know not very high, but it be felt by those who lost their jobs.”
Isely says there’s an expectation for a moderate improvement in exports compared helped by recent trade agreements, However, he adds, “The primary uncertainty for 2020 surrounds the presidential election.”
Patrick Center, WGVU News.