Kent County economy expected to ‘outperform’ US: expert
GRAND RAPIDS, Mich. (WOOD) — The economy in Kent County is on track to continue to grow in 2024, though at a slower rate compared to recent years, experts say.
Close to 1,000 business and community leaders gathered Wednesday morning at the DeVos Place for the Grand Rapids Chamber’s 136th annual State of Grand Rapids Business meeting. There, economic expert Paul Isely, the Grand Valley State University Seidman College of Business associate dean, broke down what Grand Rapids and West Michigan can expect to see in the economy this year.
“One of the most important takeaways is that we see the U.S. economy starting to slow down a little bit, at least for part of this year, and that there are enough opportunities in West Michigan that we’ll likely ride through it,” he told News 8 after the event.
He expects to see slow local growth this year, and “Kent County will continue to outperform the rest of the U.S.”
As business leaders look toward the rest of the year, Isely said during his presentation that things are very different from the past.
“If you’re using rules of thumb … stop,” he told business leaders.
Employment in the area is expected to grow by around 1.4% to 1.7% this year, slower than last year. Wages are anticipated to see 3.5% to 3.7% growth, “much slower,” than last year. Growth in sales is expected to stay consistent compared to last year, with Isely’s team anticipating a growth of 2.3% to 2.8%.
Addressing issues like child care, the need for more immigrants and the housing crisis would all contribute to more growth in the area, Isely said.
‘CONSUMER CONTROLS THE YEAR’
Isely began his presentation by saying consumers kept the economy out of a recession in 2023. Will that happen again this year?
He said while wages have been beating inflation, consumers’ savings are decreasing and credit card debt is rising. Consumer spending likely has to slow down in 2024, Isely explained.
Isely split consumers into two groups: young people, those at 39 or below, and older people, those at 40 or higher.
Young people are still dealing with the fallout of pandemic-era purchases, including high-cost cars and homes, Isely explained. The rates of 90-day auto delinquencies for those between the ages of 30 and 39 are rising and headed toward 2009 rates; for those in the age range of 40-49, the rate has increased only slightly since the pandemic and has returned to normal rates.
“Financially, people over the age of 40 aren’t showing the same financial stress that we’re seeing for people under 40,” Isely told News 8.
He explained that business owners should take two approaches to the two groups.
“If you’re looking at larger purchases and things like that, you have to target things that that older group is going to be looking at. And if you’re looking at that younger group, you need to be thinking about smaller things that happen more often that aren’t as big of a finance lift,” he said. “If you can make those adjustments, you’re going to be successful on both sides.”
In Kent County, the population of those in their 30s is growing, unlike the rest of the population, while that group is shrinking in other parts of the country.
“We’re seeing a really strong uptick here in the last year and that’s really good. We’re drawing in young people, drawing in young people who are at the start of their career, who are going to build their career here, (that) means that we have future growth,” Isely told News 8.
He said a community needs that working-age population in order to continue to move forward.
“A community that is filled with all people near the end of their career isn’t growing,” Isely said. “You can walk through a lot of rural communities who are who are facing that. Here in Grand Rapids, we’re not. We’re able to convince young people to come here. They like being here, they can hang out with other young people. … That’s a very powerful dynamic that is keeping the growth up in West Michigan, where we’re not seeing it elsewhere.”
‘ENERGIZED’ ABOUT THE FUTURE
Rick Baker, the president and CEO of the Grand Rapids Chamber, said the growing number of young people tells him the community is “investing in the right kinds of things as a community to be successful for the long term.”
After the event, he told News 8 he is ‘energized’ about Grand Rapids’ future.
“I know that there’s always bumps along the road and the economy kind of ebbs and flows and politics, but I think we have some exciting times ahead of us as a community, we’re investing in the right places and continuing to attract,” he said.
The Chamber is celebrating its own growth, as it saw its membership numbers grow from around 1,800 to 2,763 in two years. Baker expects to see that trend continue. He attributed it to the value his organization offers to businesses, the work its done in the community and the fact that it has an office space, which opened an addition last year.
“Quite honestly, (the growth is) very much bucking the trend,” he said. “When I have conversations with my colleagues around the country, memberships … (in) lot of places are declining.”
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