While countless manufacturers throughout West Michigan have lamented the lack of available talent, evidence shows the workforce constraint has finally affected the industry’s ability to grow.
That’s according to Paul Isely, an economist and associate dean at Grand Valley State University’s Seidman College of Business, who notes the limited pool of talent in the region has shown up in the productivity data for manufacturing. While sales for West Michigan manufacturers are still growing, the rate of expansion has slowed compared to past years, particularly as companies struggle to find the necessary talent.
“We certainly see manufacturing slowing down because they’re sort of out of labor, so it’s hard to grow when you don’t have a lot of workers,” Isely said.
Growth among West Michigan’s manufacturing economy has waned in recent years.
In 2016, the gross domestic product (GDP) attributed to manufacturing in the Grand Rapids-Wyoming metropolitan statistical area reached $14.7 billion, a 2-percent increase compared to the previous year, according to the latest data available from the Bureau of Economic Analysis. By contrast, the manufacturing GDP expanded at a pace of 6.6 percent in 2015 in the Grand Rapids metro area, according to the data.
Other metropolitan areas in West Michigan mirror the same trend. In the Kalamazoo-Portage MSA, GDP growth for manufacturing slowed to a rate of 1.2 percent in 2016 compared to 8.2 percent in the prior year. Manufacturing generated $3.4 billion in economic activity in the Kalamazoo-Portage MSA last year, according to the data.
Expansion in the manufacturing GDP cooled to 5.1 percent in 2016 from 10.7 percent the prior year in Battle Creek. Meanwhile, Muskegon’s manufacturing GDP shrank in both 2015 and 2016, when it was down 1.2 percent.
On their own, manufacturing jobs account for roughly 21.3 percent of the job market in West Michigan, according to a recent report by Talent 2025 Inc., a Grand Rapids-based organization that studies and promotes talent development in the region.
“We’re just out of workers … When we look around Michigan right now, there’s less than 30,000 available workers — people who are looking for jobs and are available,” Isely said. “That’s not a lot.”