Grand Rapids Economic Forecast 2021
• The Current Business Confidence Index for 2020 is 72.7%, higher than during the last two recessions.
• The Forecast Business Confidence Index for 2021 is 73.9%, showing improved expectations for 2021.
• Employment is expected to grow by 2.3% to 3.9% in 2021, showing a strong improvement over the end of 2020.
• Overall nominal sales are expected to increase by 1.1%-2.0% for 2021 reflecting slower growth than was anticipated at the
beginning of 2020.
• Exports are expected to be flat in 2021.
• All indicators signal the West Michigan economy will show solid growth in 2021 after the 2020 recession.
Introduction
Paul Isely, Ph.D., Associate Dean, Seidman College of Business
The Confidence Index survey for the greater Grand Rapids economy (Kent, Ottawa, Muskegon, and Allegan Counties or KOMA) was conducted in November and December 2020. The survey was mailed to the CEOs and business leaders of nearly 1,000 organizations based on a representative sample reflecting different sectors of the regional economy and the geographic diversity of the area. In total, 155 organizations responded, resulting in a strong response rate of 16.1%. However, due to the possibility of a non-random response sample, the survey should be interpreted with caution. The survey was timed for the week after the elections to allow respondents time to digest some of the possible implications of the electoral process.
A few methodological considerations are worth noting. Although we discuss the survey results in terms of averages, the data are represented in a histogram format to show the entire distribution of responses. The employment, sales, and export numbers are more volatile as raw averages particularly when calculated without adjusting for outliers (responses beyond plus or minus one standard deviation). Since the average of a small sample is significantly influenced by extreme numbers, averages without outliers are used to provide more reliable results. The histograms, however, depict all the available observations to show the broad picture.
Click here to view the entire 2021 Grand Rapids Economic Forecast.
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