West Michigan businesses expect ‘strong growth’ in second half of 2021

GRAND RAPIDS, MI — Businesses in West Michigan are predicting “strong growth” in the second half of this year, but challenges finding workers and shortages of steel and other raw materials continue to be a headache for employers.

Those are two of the findings of a June survey conducted by The Right Place, a Grand Rapids-based economic development firm, of 118 businesses in Kent, Ionia, Montcalm, Newaygo, Lake and Oceana counties. Businesses included in the survey are primarily in the manufacturing, technology, health sciences and food processing industries.

“Our team has been eager to head out and reengage face-to-face with our customers, which drove us to set the aggressive goal of meeting with over 100 area businesses in June,” Randy Thelen, president and CEO of The Right Place, said in a statement. “Through these meetings with regional business leaders, we’ve found an optimistic business community that is expecting strong growth in the second half of 2021.”

The survey included businesses of all sizes, although 71{8a924211cc822977802140fcd9ee67aa8e3c0868cac8d22acbf0be98ed6534bd} had fewer than 100 employees. Nineteen percent had between 100 and 500 employees, while 10{8a924211cc822977802140fcd9ee67aa8e3c0868cac8d22acbf0be98ed6534bd} had more than 1,000 employees. More than 60{8a924211cc822977802140fcd9ee67aa8e3c0868cac8d22acbf0be98ed6534bd} of the employers surveyed were in Kent County.

One highlight from the survey: increasing sales.

Eighty percent of the companies reported rising sales, with the remaining companies reporting stable sales. One company said its sales had fallen. The Right Place does not reveal the survey results of individual companies, but releases the results as an aggregate to give the public a look at how businesses and the economy are performing.

The survey also showed employers are having trouble finding enough workers.

Fifty-three percent of businesses said they were experiencing recruitment challenges. In an attempt to solve the problem, 35{8a924211cc822977802140fcd9ee67aa8e3c0868cac8d22acbf0be98ed6534bd} of businesses said they are increasing their investment in employee training programs.

“I’ve been hearing that for a long time, even pre-COVID,” Eric Icard, senior director of business development at The Right Place, said of the shortage of workers.

But he said that now, “it’s more of a challenge. We’ll see what happens in September when the enhanced benefits of unemployment expire.”

Kinks in the supply chain were another major finding.

Microchip shortages are hurting automotive manufacturers and a steel shortage is putting a strain on various manufacturing companies, Icard said.

“You look at a company like X-Rite,” Icard said, referring to the Grand Rapids-based manufacturer of color measurement and management products. “What they make are the machines that can actually tell what color a certain paint is. So every Lowe’s and Home Depot and Ace (Hardware) has one of those, and that little machine has several microchips in it.”

Another takeaway from the survey: many employers say they plan to expand.

Sixty percent of companies said they plan to expand, the survey shows. That growth is expected to include hiring more workers and investments in buildings and equipment, otherwise known as capital expenditures.

Icard said The Right Place uses its survey results to provide businesses with resources to help them overcome their challenges. For example, manufacturers who are struggling to find workers are being referred to the Michigan Manufacturing Technology Center, which is funded in part by the U.S. Department of Commerce.

He said officials at the manufacturing technology center can advise those manufacturers on how to use automated machinery to perform necessary tasks when workers are not available.

“We can make manufacturers more lean and automate certain functions,” he said. Later, he added: “In many cases, these solutions cost less than an annual salary of an employee, and can take the spot of maybe multiple (employees).”

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