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Sunday, 24 September 2017 09:41

West Michigan tracks with nation as pace of expansion slows locally

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Current-dollar GDP shown; not adjusted for inflation. Current-dollar GDP shown; not adjusted for inflation.

Economic activity up 2.3 percent in Grand Rapids for 2016

GRAND RAPIDS — Economic growth across markets in Western Michigan eased during 2016, falling closer in line with the rate experienced throughout the U.S.

The Real GDP growth rate, which is adjusted for inflation, declined in 2016 from the previous year in five of the six metropolitan statistical areas in the region, according to an analysis by MiBiz of data released last week by the U.S. Department of Commerce’s Bureau of Economic Analysis.

The lone exception was Lansing, which recorded 4 percent growth for the year and led the region when measured by the rate of economic expansion. That compares to 0.4 percent for the Lansing area in 2015 and far exceeded any of the four prior years.

The Grand Rapids-Wyoming MSA recorded Real GDP growth of 2.3 percent in 2016, down from 4.3 percent in 2015. Meanwhile, the Real GDP growth rate in Kalamazoo-Portage MSA fell to 1.4 percent, well off the pace of 5.9 percent from a year earlier.

Nationally, Real GDP growth hit 1.5 percent for 2016.

“Last year, we were performing about like the rest of the country, where the four years previous we were way outpacing the rest of the country on this side of the state,” said Paul Isely, associate dean and professor of economics at Grand Valley State University’s Seidman College of Business.

The regional statistics from the Bureau of Economic Analysis fell in line with expectations and track with employment data for the region that showed job growth slowing in 2016, Isely said.

Regionwide, the data point to some emerging weakness in manufacturing as well as some growth in construction, Isely said.

In the Kalamazoo-Portage MSA, for instance, the construction sector accounted for nearly a percentage point of the region’s Real GDP in 2016, and for a little more one-tenth of the economic growth in the Grand Rapids area.

“We really started to see a revival across the construction sector across West Michigan, and in the two largest markets, Grand Rapids and Kalamazoo, you really started to see some strength starting to occur there,” Isely said.

Through June of this year, both markets recorded strong growth in construction employment. Construction jobs in the Kalamazoo area were up 10 percent from 12 months earlier, and they rose 8 percent in Grand Rapids, according to data from the Associated General Contractors of America.

Battle Creek and Muskegon were the only MSAs in the region showing weakness in construction. The sector last year declined 0.59 percent in Battle Creek and 0.02 percent in Muskegon.

Durable goods manufacturing was strongest in Battle Creek with growth of 1.5 percent, but it was primarily offset by the aforementioned losses in construction as well as in nondurable goods manufacturing.

Among 13 economic sectors, professional and business services and durable goods manufacturing led Real GDP growth in four of the six MSAs. The exceptions were the Muskegon area and the Niles-Benton Harbor MSA, where Real GDP in both sectors declined last year.

In Grand Rapids, only three of the 13 sectors — natural resources and mining, nondurable goods manufacturing, and other services — posted declines. Professional and business services led growth in the MSA, contributing 0.78 percent toward the area’s Real GDP growth rate.

With its $58.465 billion in economic activity, the Grand Rapids-Wyoming area ranked 53rd nationally.

Elsewhere in the region, Battle Creek and Muskegon posted small gains in inflation-adjusted economic activity with growth of 0.3 percent and 0.2 percent, respectively.

The Niles-Benton Harbor area recorded the lone decline in the region, at 0.2 percent after adjusting for inflation.

Read 1299 times Last modified on Sunday, 24 September 2017 09:50

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