Economist expects Grand Rapids economy will continue to grow, slowly, in 2012
The Grand Rapids economy grew faster than predicted this year and economic forecasters say growth will continue into 2012.
George Erickcek is an economist at the Upjohn Institute for employment research. He says the Grand Rapids economy did grow in 2011, but only by two-percent. (His full presentation is linked here.)
“There’s been no talk of a double dip for many, many months. But the growth…is disappointing. It’s not the growth we want,” Erickcek told a group of business leaders assembled Wednesday.
He says a recovering auto industry and gains in advanced manufacturing are the main reasons Grand Rapids’ economy has grown.
In fact, Erickcek says Grand Rapids is technically over the recession in terms of employment numbers.
“But those short terms gains really cannot be supported in the future unless we really do something about the talent situation in our area,” Erickcek said.
Birgit Klohs, who heads the economic development group The Right Place, says growing and retaining talent is an issue many cities are struggling with, but they’re using different approaches to solve the problem. Klohs say there’s a big disconnect between people who are unemployed and the jobs that are available.
Another challenge is the growing number of people who’ve been unemployed for six months or more. Compared to similar cities, Grand Rapids has a relatively low percent of college graduates.
Erickcek says there is potential for “some pretty rapid growth in business investment” because he says businesses and banks have a lot of money saved up. If the economy shows stronger signs of growth, Erickcek says businesses could grow significantly by taking advantage of really low interest rates.