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Crystal Ball (122)

2018 MiBiz Crystal Ball, at a glance

Written by | Tuesday, 26 December 2017 11:14 |

Every year, the Crystal Ball edition from MiBiz offers insights, economic sentiment and forward-looking strategies from West Michigan’s business leaders. Here’s what they had to say about 2018.

2018 Crystal Ball: Momentum

Written by | Sunday, 24 December 2017 19:30 |

In the dozens of interviews with West Michigan executives for this special edition, the notion of momentum — whether within the overall economy, their industry or their company — seemed to dominate their outlook for next year.

As president and CEO of Ada-based construction management firm Dan Vos Construction Co. Inc., Dan Vos would like to continue to see the pro-business philosophy that’s been on display in Michigan for nearly the last decade. Vos generally thinks 2018 will continue the momentum of the past few years, although he harbors some concern over burnout from the firm’s lengthy pipeline of work.

Tasha Blackmon becomes CEO of Cherry Health on April 1, 2018, succeeding long-time chief executive Chris Shea, who retires on March 31. Blackmon will move into the CEO’s position of the largest federally qualified health center in Michigan — with 20 locations in Kent, Barry, Eaton, Montcalm, Muskegon and Wayne counties and some 70,000 patients annually — after serving as chief of operations.

As the end of 2017 approached, Grand Rapids-based Independent Bank Corp. cut a deal to buy TCSB Bancorp Inc. in Traverse City, the parent company of Traverse City State Bank. The $63.2 million deal, which is expected to close in the first half of 2018 pending approval from regulators and TCSB Bancorp shareholders, would extend Independent Bank’s presence in northwestern Michigan, where Traverse City State Bank has five offices and assets of $346.9 million. Independent Bank, which opened lending offices in Traverse City and other markets this year, has 65 branches across the Lower Peninsula with total assets of $2.75 billion as of Sept. 30.

Brian Walker continues to believe the overall fundamentals of the economy remain strong, but the ongoing wave of nationalism and demonstrations of military might cause him some degree of concern. The president and CEO of Zeeland-based office furniture manufacturer Herman Miller Inc. (Nasdaq: MLHR) counts on free and open access for the trading of goods for his company’s continued success. Meanwhile, the continued “geopolitical noise” from external events like Brexit only creates uncertainty, he told MiBiz at the recent Business Leaders for Michigan CEO Summit in Detroit.

The American Institute of Architects (AIA) publishes the quarterly Architectural Billings Index (ABI), which is generally viewed as a leading indicator for the construction industry. While the data fluctuated throughout the year, architects’ billings have been largely positive, according to the Washington, D.C. trade association. Heading into 2018, AIA Chief Economist Kermit Baker generally expects more of the same, albeit with some uncertainty surrounding national policy issues.

2018 Outlook: Tom Welch, Fifth Third Bank

Written by | Sunday, 24 December 2017 17:11 |

Tom Welch thinks the U.S. economy in 2018 will perform much as it did in 2017 with steady growth and further tightening of the labor market, the latter of which rates as his biggest concern. He said that, mixed with high business confidence and a boost from the expected passage of federal tax reform, the economy should generate plenty of commercial lending opportunity for Cincinnati, Ohio-based Fifth Third, the deposit market leader in West Michigan. Welsh also believes the Federal Reserve will raise interest rates further in 2018, while inflation should remain relatively low.

One of the biggest issues Carl Bednarski expects to deal with in 2018 is the national Farm Bill, which will address agricultural concerns in infrastructure, crop insurance and exports. The president of the Michigan Farm Bureau discussed what legislation will affect the agricultural community the most.

While 480 square feet of space may not seem huge for a taproom, it offers The Peoples Cider Co. needed visibility along the burgeoning West Leonard Street corridor in Grand Rapids. Owner Jason Lummen opened his new taproom in late October on a strip with a distillery and a brewery, which he hopes will create new synergies. The proximity to the other producers has increased the company’s exposure, as well as freed space at his production facility on Maryland Avenue in the Oak Industrial Park. Lummen’s operation currently produces about 200 barrels per year and he hopes that separating his taproom from his production operation offers room for growth. He describes business at the new facility in one word:

Annual increases in premiums for employee health coverage were mostly moderate in 2017. It’s a trend from the last few years that Shannon Enders, managing partner at Lakeshore Employee Benefits in Norton Shores, said largely continued for employers who renewed policies for 2018. Enders is also seeing more employers offering various options for employee health benefits, and some are even wondering whether they have gone too far in shifting the costs for health coverage onto employees.

Sam Cummings will be the first to acknowledge that he’s got a lot of office and retail space to fill in downtown Grand Rapids next year, with redevelopment work underway at 50 Monroe Ave. NW and unspecified plans in the coming years for the downtown Fifth Third Bank campus, which has been dubbed Vandenberg Center. Cummings says CWD plans to work diligently over the next year to attract large corporate users, bring more activity to ground-floor spaces and focus on the fundamentals of real estate development.

Decreases in funding from both governmental agencies and other funders who support the needs of the LGBTQ community are cause for concern as Outfront Kalamazoo goes into 2018. Executive Director Jay Maddock said his social justice organization relies on grant funding, individual giving and successful fundraising events, meaning that any hit to the economy will affect all areas of the group’s funding.

Jeff Mason took over in mid July as CEO of the Michigan Economic Development Corp. after eight years of running the University Research Corridor, a coalition of the state’s top three research universities including Michigan State, Wayne State and the University of Michigan. According to Mason, talent remains the top issue for the MEDC, particularly as the state’s economy continues to grow.

Broadview Product Development Corp. had strong business in 2017 with its automotive industry customers and also grew sales to office furniture manufacturers by 25 percent. That growth has President Rick Arnold facing some key challenges at the prototyping and engineering firm. “We’re busier than we have been, and we are busier than our resources can support,” he said. Like most businesses these days, Broadview constantly wrestles with concerns over talent, which remains a key issue for the company heading into 2018.

The further the U.S. gets from the last downturn, the greater the likelihood that another challenge will eventually “rear its head again,” says Mercantile Bank Corp. President and CEO Robert Kaminski. Yet as 2018 approaches, Kaminski doesn’t see any warnings signs from the Grand Rapids-based bank’s clients that portend a downturn is imminent. Instead, he expects the U.S. economy to stay on track.

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