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Original article URL: http://bridgemi.com/2013/12/future-job-growth-favors-west-michigan/

Economy & competitive position

Michigan's Christmas Carol:

Future job growth favors West Michigan

 

Michigan’s economic axis is tilting west, which will likely create thousands of good-to-high-paying jobs in the Grand Rapids and Traverse City regions, as well as Ann Arbor, over the next decade.

While metro Detroit is expected to add the largest number of jobs in Michigan, the highest rate of job growth will be in West Michigan, Northwest Lower Michigan and the Ann Arbor area, according to a Bridge study prepared by Public Sector Consultants in Lansing.

Those three regions are expected to generate jobs at twice the rate of the tri-county metro Detroit region, which is home to nearly 40 percent of Michigan’s residents.

Combined, the three high-growth regions are forecast to add 116,507 jobs by 2023, compared with 71,409 new jobs in metro Detroit, which encompasses Wayne, Oakland and Macomb counties.

Even so, not all of West Michigan is expected to grow at the same high pace, said George Erickcek, senior regional analyst at the Upjohn Institute for Employment Research and an expert on West Michigan’s economy.

For example, job growth in a seven-county region that includes Kalamazoo and Battle Creek is forecast to match the sluggish state average of 6 percent over the next decade. By contrast, the Grand Rapids area, fueled by diverse professional, business and technical jobs, and strong neighborhoods, likely will continue to boom, Erickcek said.

“That bodes well for Grand Rapids to create an environment in which it can attract the young knowledge workers the region will need,” Erickcek said.

Job growth of 4 percent over the next decade in the three-county metro Detroit region is forecast to be the lowest among the state’s 10 new “prosperity regions,” which the Bridge study used in forecasting job growth.

The 13-county West Michigan region that includes Grand Rapids and a six-county region that includes Ann Arbor are expected to post the fastest employment growth, each expanding jobs by 9 percent through 2023.

Jobs are expected to grow by 8 percent in the 10-county Traverse City region, the third-fastest growing region in the state, according to the Bridge analysis.

Local officials in these faster-growing regions say they are capitalizing on a pronounced shift to higher-paying technical and professional service jobs, and customized manufacturing.

“When I came here from Silicon Valley two-and-a-half years ago, I was struck by the diversity of high-technology companies in the area,” said Paul Krutko, president of Ann Arbor Spark, a local economic development agency. “There are a lot of small companies making small things of high value.”

West Michigan’s hottest industries have been manufacturing, food processing, health care, and an array of professional and technical services. Local economic developers expect those industries to continue growing into the next decade.

The geographically diverse region of about 1.8 million people includes the scenic Lake Michigan shoreline, presenting an attractive environment for prospective workers and employers.

“We’ve got a list of assets and features that every company could want,” said Tim Mroz, spokesman for The Right Place, an economic development agency in Grand Rapids.

“Our goal is to move toward a larger, more regional economic development model,” Mroz said. “If you have a 1.8 million population segment, then really you’ve got something to market.”

Greater regional cooperation also is a goal of Gov. Rick Snyder’s administration, which carved the state into 10 “prosperity regions” in August.

Doug Smith, senior vice president of strategic partnerships at the Michigan Economic Development Corp., said the regions could help the state exceed the tepid job growth predicted for the state over the next decade.

He cited the seven-county East Michigan region, which includes Genesee and the Thumb counties, as an area that has only recently been collaborating on economic development, and is expected to grow by 7 percent over the next decade. The region is working to market the I-69 corridor as a major international trade route that can transport goods coming to the United States from Canada at Port Huron using highways, air and rail.

“Companies couldn’t care less about municipal or county boundaries,” Smith said. “Working regionally gives you a better understanding of the assets you have to encourage job growth.”

The sluggish job growth projected for the metro Detroit region is in part a result of the region shedding thousands of jobs in declining industries, such as manufacturing, construction and retail. The Detroit area is expected to lose 38,067 jobs in declining industries, 87 percent of all declining-industry jobs expected to be lost statewide.

Detroit could surprise

But some experts say the recent stronger-than-expected growth in auto manufacturing and other industries could result in metro Detroit becoming a more dynamic job creator than projected over the next 10 years.

“The auto industry is recovering really well, but how that plays out in the future remains to be seen,” said Xuan Liu, manager of data analysis at the Southeast Michigan Council of Governments.

Metro Detroit, with four major medical centers and two medical schools, also is positioned to benefit from expected growth in health care, he said.

The health care and social assistance industry is expected to be the fastest growing jobs sector in the state over the next decade, adding 105,368 jobs and expanding by 18 percent. Those jobs pay an average of between $21,306 for elder care to $65,201 for nurses and other hospital jobs.

And jobs in metro Detroit, whether they are in growing industries like computer systems design, or in declining industries such as manufacturing, will continue to outpace pay in the rest of the state.

Jobs in growing industries in Metro Detroit are expected to pay $21.84 an hour in 2023, compared with the state average of $20.29 an hour and $18.96 an hour in West Michigan.

Jobs in declining industries, paced by manufacturing, are expected to pay $22.44 in Metro Detroit, the highest such wage in the state.

“The bigger the metro area, the higher paying the jobs tend to be,” said Don Grimes, a University of Michigan economist. “There’s a huge wage advantage for workers in Southeast Michigan.”

Ann Arbor, Traverse City and West Michigan are expected to produce higher job growth than the rest of the state essentially because that’s where the population will be expanding over the next several decades, Grimes said.

Grand Traverse County, including Traverse City, has doubled in population since 1970 to about 80,000 residents. And state demographers say the four-county Traverse City “micropolitan area” will likely become Michigan’s newest metropolitan area when the 2020 census figures are tabulated.

But growth in the Grand Traverse area and the rest of the state will be constrained by relatively slow population growth of working age adults statewide, Grimes said. Many people moving to the Grand Traverse area will likely be retirees.

“We’re going to run out of people of working age,” he said. “That’s going to be the primary constraint on Michigan’s labor force in ways we haven’t seen.”

Rick Haglund has had a distinguished career covering Michigan business, economics and government at newspapers throughout the state. Most recently, at Booth Newspapers he wrote a statewide business column and was one of only three such columnists in Michigan. He also covered the auto industry and Michigan’s economy extensively.

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