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Friday, 31 January 2014 12:59

Economists report more confidence in economy

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Paul Isley Paul Isley PHOTO COURTESY OF GVSU

Business executives across West Michigan feel more confident about the economy than they have at any time in more than a decade.

Results from an annual Grand Valley State University survey of CEOs and business leaders in a four-county region generated a confidence index of 70.42 percent toward the end of 2013, which compares to 67.85 percent a year earlier. The results were the best showing since a reading of 80.2 percent in 2000.

Based on responses to the survey, GVSU Seidman College of Business economists projected employment growth of 2.7 percent to 3.1 percent in 2014 in Kent, Ottawa, Muskegon and Allegan counties; sales growth for respondents of 2.4 percent to 2.8 percent; and an 8 percent to 9.2 percent increase in exports from the region.

“All indicators signal the 2014 economy is growing faster than during the last two years,” GVSU economics professor Paul Isely wrote in the report presented Friday during an annual economic outlook at GVSU.

The outlook is based on the results of surveys that GVSU conducted in October and November that generated 227 responses.

Sixty-nine percent of respondents said they planned to hire new employees in 2014, up from 58 percent a year ago. More than three-quarters of the hiring will be for permanent positions.

“We’re going to see some pretty broad-based growth and that growth probably is going to stay in the business services and the service sector more than anything else,” Isely said.

Strength in health care and manufacturing employment will continue, although “they’ve had a pretty good run,” so any growth on those sectors will probably not match the recent past, he said.

Nationally, Isely expects economic growth of 2.5 percent to 3.5 percent as the U.S. economy continues “the slow acceleration seen in 2013.”

Employment nationwide will continue to improve in 2014 as “full-time hiring will increase significantly as businesses become progressively more confident about the future,” Isely wrote in the outlook. “However, it is not likely that the employment situation will improve dramatically.”

He projects the U.S. unemployment rate will stay about 6.4 percent by year’s end.

In an outlook presented to clients earlier last week, Comerica Inc. chief economist Bob Dye said he expects annualized U.S. GDP growth of about 3.0 percent in 2014.

“We can start to leave the slow-growth economy behind us and start to call it moderate growth,” Dye said.

In two areas that bode well for West Michigan’s office furniture industry, Dye expects corporate profits to remain strong and noted that office and commercial construction are “at least beginning to show signs of life.”

Growth for the auto industry — which has posted a strong recovery and elevated Michigan’s economy the last two years — may begin to plateau in 2014 and top out at 17 million units built in North America, he said.

“The amount of lift (from the auto industry) going forward is much smaller than it’s been,” Dye said. “We’re a lot closer to the top of the auto (growth curve) than the bottom.”

Read 2873 times Last modified on Friday, 31 January 2014 13:05

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