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Published in Economic Development
Request Foods Inc. plans a $205 million expansion project to add significant storage and production capacity in Holland Township. Request Foods Inc. plans a $205 million expansion project to add significant storage and production capacity in Holland Township. COURTESY PHOTO

Lakeshore companies experienced growth despite talent, supply chain challenges in 2022

BY Monday, January 02, 2023 05:23pm

Executives from 120 companies in Allegan and Ottawa counties overwhelmingly reported positive growth in 2022, despite continuing challenges they face when it comes to attracting talent and supply chain disruptions. 

These were among the top findings in the 2022 Industry Trends report published Dec. 15 by economic development organization Lakeshore Advantage Corp. The report analyzes interviews conducted last year by Lakeshore Advantage with senior-level executives from employers in Allegan and Ottawa counties. The Grand Haven-Spring Lake-Ferrysburg Chamber of Commerce also assisted with the interviews.

“The data mostly reinforced what we knew, which is that because of our diverse manufacturing base, our economy is strong and employers are diverse in the region, which also protects them from (economic) downturns,” Amanda Murray, vice president of business solutions at Lakeshore Advantage, told MiBiz.

The report also highlights 33 expansion projects — more than double the amount that the organization typically tracks in a year — that Lakeshore Advantage helped companies complete in 2022. The number could partly be attributed to pent-up demand from projects that stalled at the beginning of the pandemic, Murray said. But it was higher than expected, especially with the struggles that companies have reported in finding adequate talent and the lack of available, developable industrial land, Murray added. 

The average expansion among the 33 projects cost $8 million, added an average of 19 new jobs, and was an average of 53,000 square feet, according to the report. 

“The lack of talent and the lack of available, existing industrial space is a barrier to growth,” Murray said. “In 2022, companies just had to expand based on their increase in sales. Companies were also building more warehousing space to keep more material on hand because of supply chain issues.”

Eighty percent of the executives interviewed, roughly the same amount as last year, reported supply chain disruptions during the year. The affected industries include automotive manufacturing, furniture and related product manufacturing, consumer goods producers, and transportation equipment manufacturing. 

“Forty percent of companies who reported supply chain disruptions indicated they plan to bring outsourced goods and services back in house,” Murray said. “They’re mostly bringing machining, painting, and anodizing back in house. We’re also seeing more vertical integration as companies identify how they can adapt and take more control over their timelines.”

As well, Lakeshore Advantage is working with landowners and communities to increase the amount of developable industrial land, Murray said.

The report also highlights companies’ ongoing shift to automation. 

“I think we are seeing companies look more closely at automation and other types of technology to help improve their bottom line,” Murray said.

In previous years, cost was companies’ biggest barrier to automating certain aspects of their operations. Today, a lack of talent available to implement new technologies is the biggest barrier, Murray said.

Sixty-nine percent of companies surveyed reported recruitment problems, down from 75 percent in 2021, mostly tied to skilled positions. The top positions needed by employers were in engineering, production and machinists, according to the report.

The findings also confirm the significance of the region’s food processing industry, which joins furniture, fabricated metal products and electronics in the region’s manufacturing sector. Thirty percent of all jobs in the two-county region are tied to manufacturing.

“There has been a continued focus on food processing,” Murray said. “For Michigan as a whole state, it’s not a top industry, but out here on the lakeshore it certainly is. We’re working on supporting our existing food processors, the cold storage and packing sectors, and we’re seeing that the industry is continuing to grow from an infrastructure standpoint.”

Five local food processors across Allegan and Ottawa counties invested $1.5 billion in their business over the past three years, according to data from Lakeshore Advantage. That includes a $205 million expansion project led by Request Foods Inc. to add significant storage and production capacity in Holland Charter Township.

Overall, the executive survey indicates that a large majority of companies are on steady ground. 

More than nine of 10 executives reported that their company’s sales were increasing or stable, up from 83 percent in 2021. Of the executives surveyed, 82 percent said they were introducing new products, services and/or capabilities, compared to 87 percent in 2021.

CORRECTION: A previous version of this story incorrectly stated the number of expansion projects that Lakeshore Advantage helped companies complete. It was 33 projects, not 34.

Read 2357 times Last modified on Tuesday, 03 January 2023 12:25
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