February 10th, 2021

The Right Place 2021 Economic Outlook Recap

In December 2020, The Right Place hosted the 24th Annual Economic Outlook for West Michigan. In light of the COVID-19 pandemic, the event was hosted virtually for the first time since the series began.

Greater Grand Rapids Event Recaps

In December 2020, The Right Place hosted the 24th Annual Economic Outlook for West Michigan. In light of the COVID-19 pandemic, the event was hosted virtually for the first time since the series began.

President and CEO of The Right Place, Birgit Klohs, offered a year-in-review presentation. Klohs highlighted several notable accomplishments over the past year, as well as a summary of The Right Place’s response to the COVID-19 pandemic. 2020 marked the first year of The Right Place’s new 2020-2022 strategic plan, along with the final full calendar year of Klohs’ tenure as President and CEO of The Right Place.

The event also included an in-depth economic analysis and forecast for West Michigan in 2021 by Director of Regional and Economic Planning Services for the W.E. Upjohn Institute, Jim Robey.

The Right Place Results

While responding to the pandemic was a key focus of The Right Place team, traditional economic development work was still able to forge ahead. The Right Place made significant progress on its new 2020-2022 strategic plan metrics, spurring 953 new and retained jobs, $43M in new and retained payroll, $105.6M in new capital investment, 994 talent assists, and an average hourly wage of $21.60 within its economic development projects.

Most notable was the number of business assists that took place in 2020. The Right Place team provided nearly 5,000 business assists to West Michigan companies throughout the year. Each assist represents an interaction creating tangible, actionable value for the businesses and organizations receiving support. By comparison, the organization typically provides around 2,000 business assists in an average year.

The COVID-19 pandemic created an unprecedented demand for The Right Place’s services. While traditional business retention, expansion and attraction work continued throughout the year, the organization also launched new initiatives to better support the West Michigan business community through the challenges of 2020.

Pandemic Response: Communication

Clear, consistent, and continuous communication became a top priority as the world was plunged into a crisis never before seen in modern times. A side effect of grappling with the COVID-19 pandemic was the massive amount of information pouring in from every direction. The team at The Right Place recognized how critical it would be to ensure West Michigan business and community leaders had a reliable source of up-to-date information in one central location.

In collaboration with several community partners, The Right Place convened the West Michigan COVID-19 Business Coalition, which launched an information resource site in late March of 2020. This site was regularly updated with pertinent information for business leaders, including legislation updates, business continuity resources, health updates, best practices, and employee resources.

Pandemic Response: Leveraging Resources

Early on, the team at The Right Place also began mobilizing and leveraging their resources to support West Michigan’s healthcare systems and local businesses. In a matter of days, connections were made to ensure critical supply chains were established between hospitals in dire need of PPE and manufacturers with the capabilities to meet those needs.

The Right Place continued using its connections to compile a comprehensive, 22-page directory of PPE suppliers in West Michigan, utilized over 11,000 times since it was published. The organization also launched a new webinar series, Navigate 2020, to bring business and community leaders guidance and insights on the most pressing topics impacting businesses.

Additionally, in April and September, the team distributed a total of $10.5 million in Small Business Relief and Small Business Restart Grant funding on behalf of the Michigan Economic Development Corporation (MEDC). A total of 1,225 small business in the 11-county West Michigan region overseen by The Right Place were awarded grant dollars from this program.

Looking Ahead to 2021

Jim Robey’s presentation touched on several indicators of the COVID-19 induced recession and potential recovery, as well as longer-term projections for the state and region.

In 2020, the U.S. experienced a deep recession with a potentially quick recovery. Employment in the US, as of December 2020, was only slightly higher than December 2007. The COVID-19 pandemic also had a greater impact on the economy than the Spanish Flu of 1918, making these conditions truly unprecedented.

However, Robey noted that GDP growth was expected to remain solid, while Moody’s prediction of being in a recession for the next 6 months decreased to 31%.

Additionally, the national Purchasing Managers’ Index (PMI) stood at 57.5 in November, indicating the manufacturing sector is expanding. Light Vehicle sales and Class 8 Truck orders also rebounded, although uncertainty remains on if working from home will impact this trend in light vehicles.

Robey also pointed out that as of October 2020, the Grand Rapids MSA unemployment rates stood at 3.7%, nearing pre-pandemic levels. The MSA has quickly recovered jobs that were displaced during the COVID-19 recession. In particular, the region’s manufacturing employment has rebounded faster than the state or nation despite taking a large hit during the lockdown.

As it stands, long term projections for the Grand Rapids MSA indicate the recovery should continue. The region is trending towards return to original pre-COVID employment forecasts between 2024 and 2025. The economy is projected to continue growth, though somewhat below pre-COVID forecasted levels.