2014- A look forward

January 3, 2014

By Pat Maurer

Experts say 2014 should show more “slow and steady” improvement in the State’s economy.
According to an internet article by Bernie DeGroat written in mid-November, University of Michigan economists say, “Steady job growth over the next two years will bring Michigan back to job levels posted just prior to the 2008-09 Great Recession and nearly halfway back to mid-2000 levels.”

In their annual November forecast of the Michigan economy, George Fulton and colleagues Joan Crary and Donald Grimes said the state will add some 130,000 jobs during 2014 and 2015, after gaining about 80,000 jobs in 2013 and more than a quarter million since early 2010.

“The story based on measures of the macroeconomy is largely encouraging and optimistic,” said George Fulton, director of U-M’s Research Seminar in Quantitative Economics. “Michigan is closing out 2013 with a healthy year of growth, the second-largest gain in jobs since 1999.

The article said, “U-M economists predict job gains of 65,000 in 2014 and another 65,800 in 2015, in excess of the average yearly gain of 57,000 jobs from 1971 to 2000—prior to the downturn of the past decade,” and added that “Roughly 60,000 job gains during the next two years will be evenly split among professional and business services and the trade, transportation and utilities sector (which includes retail).”

Locally, Don Chiodo, Financial Advisor for Edward Jones of Clare agreed. He said, “After a fantastic 2013, I expect continued slow but steady economic growth which should lead to another solid year for investors in 2014.” He added, “The start of a new year is a great time to review retirement plans, or if already retired, to review plans for income in retirement.”

Roger Williams, Clare Chamber President and Northern Division Mortgage Officer at Isabella Bank said, “I speculate that we will see a modest rebound in the area’s economy in 2014. A large percentage of that will be due to vacationers coming back to the area and spending their money locally. The 3rd quarter saw many downstaters back in the housing market looking for second homes. I look for that to go back into full swing as spring approaches and buyers go back to looking for vacation residences. Although this may not increase existing home values immediately, it will begin to lay the foundation of getting home values moving back towards a positive direction.”

He added, “With vacationers making a commitment to make Clare County and the surrounding areas their permanent vacation destination, the small and midsized businesses that have struggled over the past few years, should see an increase in sales. Brighter days are ahead.”

Jim Allen Clare Industrial Development Corporation President and Clare Community Foundation Director, said he feels the next year will be a good one for the Clare area. He said, “The members of the IDC are very encouraged with the outlook of the greater Clare area economic outlook for the near term future. Many local commercial/industrial employers are holding their own or expanding operations. The new Industrial park expansion will create construction type jobs as work on the site begins next year. Once constructed the park immediately begins to retain and expand jobs available within our community. With the planning foresight, we will have the infrastructure within our Clare area to take advantage of a hopeful expansion in the Michigan economy. Things look very hopeful for our community.”

He continued, “I also wear another hat as director of the Clare County Community Foundation. While the foundation is not often thought of in terms of economic development, the Clare County economic wellbeing is the heart of the foundations mission. We build relationships and promote collaboration within all aspects of the community creating dialogue and advocating change and action on matters that make an impact on the economic advantage of the county’s residents. Our grants from philanthropic giving allow our community to grow and prosper forever.“

Dan Dysinger, Grant Township Supervisor, outlined challenges the local townships will be facing. He said, “In 2014 and beyond the two major factors which will affect us locally are continued infrastructure deterioration and inflationary pressures. While the Bureau of Labor Statistics label inflation insignificant at less than 2 per cent in our past year, this rings hollow on family households today. Our National leadership has encumbered our citizens and businesses with a far more complex tax system, also spending beyond our means. This is foolish economic policy.”

He continued, “Our State leadership needs to embrace further tax simplification and in doing so find courage to address the crumbling infrastructure in Michigan. Without good roads and a stable inflation adjusted means to pay for them, a community languishes. Good roads lead to economic vibrancy; this is where we need to go.”

Although nationally the unemployment rate has dropped to seven percent, Michigan’s rate is higher at 8.8 percent and the recent elimination of extended benefits for people who have been unemployed for more than 20 weeks could slow economic growth, according to internet information from the Christian Science Monitor. Extended unemployment benefits ended December 28 and were then extended to January 1.

White House economists say failing to extend the benefits would cost 240,000 jobs in 2014. The estimate it will also cause a drop in the gross domestic product of from.2 to .4 percent.

Alison Doyle, author of about.com, reported this week on the web that bi-partisan legislation will be introduced January 6 to extend long-term unemployment benefits for another three months.

Rod Loomis, Community President Chemical Bank – Clare said, “For our perspective, we believe that the economy for 2014 will be much like the economy we experienced in 2013. Interest rates will likely remain low for the coming year. We are seeing that certain segments of the economy have recovered and are doing well, which is a good sign.”

Dan Timmins, Community President of Firstbank in Clare, said he is also cautiously optimistic for the coming year. He said, “The forecast is that mortgage rates will be increasing next year, but we aren’t sure how much or how fast. Market values seem to have stabilized and we are no longer seeing depreciation in the housing market. We are seeing more new mortgages and fewer foreclosures. Things seem to be more stable and are slowly moving forward again. There was more new construction in 2013 and hopefully there will be even more in 2014.”

He reported, “There are more challenges now when applying for a mortgage. New Federal regulations require more documentation than ever before. Over all there are some positive signs for the economy.”

Both Statewide and locally, school districts are still facing economic challenges.

Farwell School Superintendent Carl Seiter said, “Economic pressure continues for most all of our local communities. As Farwell Area Schools looks into the future of 2014, planning and providing continued student opportunities are the focal point of our district. Planning and dialog about the operation and the structure of our school district is something that occurs continuously. Every organization, in any economic climate, must assess, evaluate, change and adapt in order to survive. Well run, competitive organizations are continuously searching for efficiencies that lower cost and produce a higher quality product. Public schools are no different. We look to lower costs where possible and work tirelessly to improve our students.”
He continued, “With Gov. Snyder’s plan to increase economic opportunities for business in the State of Michigan, local schools and communities must do their part by ensuring that we can provide a skilled, educated work force to any business enticed to expand or start up in Michigan. Although these plans, like the elimination of the Michigan Business Tax (MBT), have hit schools financially, increased business in Michigan could provide long-term benefits for all of us. Signs of the economic recovery are there…. higher revenues, lower unemployment, more jobs. However, the problem is we are recovering at a much slower rate than anticipated.”

He added, “Farwell Area Schools, through our Dual Enrollment and Early College opportunities, is doing our part by producing students that demonstrate success. Amid this economic downturn, I recently attended a community forum held by the Michigan Commission on Community Action and Economic Opportunity. Several organizations came together and discussed support ideas and the elimination of poverty in Clare and Gladwin Counties. In simple terms, the way to address poverty is through education.

An educational path such as successfully completing college courses or through Career and Technical Education (CTE) in order to acquire specific, job-ready skills will ensure that our young people are employable. Without being employable, poverty is inevitable.”

Seiter said, “Farwell Area Schools ensures this employability through our Dual Enrollment and Early College programs. Research shows that when an individual achieves a level of 20 college credits which includes the successful completion of a freshman level English course, that student is 75 percent more likely to complete a college degree. FAS works to get as many students as possible to this level. For those job-ready skills of CTE, our students take courses like Welding and Auto Technology for college credits either during their high school 10th, 11th or 12th grade years or in their Early College 5th year. What is a better measurement of career and college readiness than having 60 percent of your high school students successfully completing college courses before they graduate high school?”

Doniel Pummell, Clare Schools Superintendent, added a positive note. She said, “The [Clare] district will continue to make sound financial choices. Enrollment this year has held steady, which is a major positive. We have fantastic student programs. Our supportive families and community empowers our talented staff to do great work for our students! We are all here for the kids. Our Mission at Clare is to create personal success for each and every student! As our legislators change laws and change funding, we will persevere because we are here to ‘teach’ the kids.”

She added, “School funding has been a challenge and will continue to be so, but we have a wise School Board. We have kept the programs we value, and added others to enhance the education of our students.”

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