7&4 News has a detailed update on our region's current economic state and a forecast for what to expect for the future.
The Bank of Northern Michigan works with hundreds of small and mid-sized businesses in the area and through these client interactions, it's gained a solid business economic perspective for 2012.
Senior Vice President of The Bank of Northern Michigan Jeremy Hawke says, "Cautiously optimistic..."
Thatâ??s the overwhelming feeling regarding the economic future of our region, as executives at The Bank of Northern Michigan reflect back on a half a year of local business trends.
Theyâ??re calling it a soft recovery, but some areas have experienced some robust rebounds, like real estate. Hawke says, "With rates being as low as they have been and the market being soft for so many years... were seeing some sale activity that probably is pent up demand so youâ??re getting some transactions we haven't had last few years..."
Manufacturing is also on the upswing in northern Michigan. Hawke explains, "The automakers are projecting around 15 million units sales this year which is materially up from past couple years and as a result of that a lot of companies in the area that supply auto parts are having production ramp up's and seeing increased activity."
But it's not all positive business news. In fact, demand may be up for auto manufacturing, but there's been no hike in businesses hiring employees or spending money. Hawke says, "They're doing a lot more, but their doing it with less. They've not going back and replacing staff that they may have let go when things started to slow down. They're doing that with capital also, so we've not seen them go back out and spend money on new equipments.
Another downside of 2012 was the warmer-than-normal march followed by some below freezing nights, that left many cherry and fruit growers in a devastating financial situation. The one-two punch wiped out more than 90% of most farmers crop yield.
Also extremely low natural gas prices have affected business in the area. Hawke says, "The companies that would normally explore and drill well sin the area that activity is not going on in northern Michigan. The people involved in that industry are reaching out to other geographies... in the state of Michigan, in the south, or out in the Dakotas or the Appalachians."
As we look ahead to the rest of 2012, there are some new areas of business to keep an eye on. Many companies are getting involved in aerospace production as well as exploring wind energy opportunities.