PNC forecasts job growth of 1.1 percent in 2013 for a region that covers the southwestern quarter if the Lower Peninsula, including Grand Rapids, Kalamazoo, Battle Creek and Lansing. That compares to an estimated 1.3 percent in 2012 and 1.2 percent in 2011.
During the year, as the auto industry drives job growth in manufacturing and the service sector accelerates, the region’s unemployment rate will continue to inch downward from a projected 7.0 percent at the end of 2012 to 6.5 percent by December of 2013, economists predict.
A year ago, unemployment at the end of 2011 stood at 8.4 percent.
Southwest Michigan’s recovery from the recession “has been all one could ask for through year-end 2012,” PNC economists wrote in a regional outlook released this week. “After suffering some of the worst effects of any region during the recession, the market area saw its auto industry storm back in the first two post-recession years, and leading through the end of 2012, the incomes generated in those initial years has flowed through to consumer spending, thereby supporting service and retail sector job creation.
“While Southwest Michigan still has several years of growth ahead of it in order to recapture pre-recession employment, the trends toward that goal will be broad based and are likely to be uninterrupted.”
Nationally, PNC projects unemployment to slowly dip during the full year to 7.7 percent, compared to a projected 8.1 percent at the end of 2012.
Compared to the national economy, Southwest Michigan has “several advantages that provide it with upside potential concerning these growth prospects,” the PNC outlook states. “Its broad availability of skilled labor at competitive wages, along with favorably low industrial and office rents, will lend support to the long-term development process of attracting new employers to the market area.”
The housing market in the bank’s Southwest Michigan region has more recovery to do than the employment sector, although home prices “appear to be set for slight, but steady positive growth beginning in early 2013,” PNC economists wrote.
“Household balance sheets have already begun to recover in earnest, with personal bankruptcy filings having fallen back below the national average after rising to uncharacteristically match that average during the recession. Stable home values will instill confidence that rising incomes can be spent back into the local economy without significantly jeopardizing overall wealth.”
PNC projects housing prices is the region to grow 2.6 percent in 2013, versus 0.5 percent in 2012 and a decline of 3.3 percent in 2011.