GRAND RAPIDS (WZZM) -- West Michigan businesses are feeling optimistic about 2013 as the region's economic forecast continues to look promising.
Rob Dwortz, President and CEO of The Bank of Holland says 2012 was a very strong year for the West Michigan economy, in particular his clients which represents a "great cross section of the overall economy."
The Bank of Holland recently completed and released its annual Crystal Ball overview, a broad look at trends in the local business sector. The bank president sat down with more than 50 bank customers, small to mid-sized business across multiple business sectors, and found most had few concerns about the new year and high expectations.
"More than 75% of the people we sat down with were planning to invest in growth - hiring, facilities expansion and buying new equipment," said Dwortz.
Dwortz says many of his clients had a "record year" in 2012 in particular those in the manufacturing sector.
"The automotive sector has been a huge contributor for the entire state and West Michigan as well in the increase or improvement of manufacturing," he said. "At the same time there has been a fallout of the automotive supplier base over the past few years as a number products, because of the dramatic cost difference, were sourced in China. That has reversed itself to a degree at the same time the level of overcapacity in the automotive supplier base has come down."
He says that has resulted in much healthier companies in West Michigan which have reduced cost structure, capitalized on the increased demand and headed in the right direction.
Dwortz expects manufacturing and construction to continue to grow in 2013, but at a slower pace.
"Construction industries were also up, particularly residential construction. And all related industries that support construction and manufacturing saw significant gains," said Dwortz.
The Bank of Holland saw a 36% increase in residential construction lending last year. This year, the bank expects more modest growth at about 10% to 15%.
He says urban development continues to thrive in West Michigan with a strong demand for downtown apartments and mixed use construction in the city. And, while 2012 was a rough year for local growers and farmers Dwortz thinks this year they will fare much better.
"West Michigan has experienced a good old fashioned V-shaped recovery where you go down the curve and come out. The rest of the country has not. It has come out very slowly. The reason is that prudence of management here in West Michigan and the lack of over-investment. And also I think that fearless entrepreneurial spirit that exists here," he said. "I think it is those companies those small to mid-sized businesses that individually may not move the needle because they represent a smaller portion of the employment base but collectively represent a huge opportunity."
And what makes 2013 an even more attractive time for companies to invest is the fact that banks are sitting on a pile of liquidity, according to Dwortz.
"The economy is moving ahead much more predictably today than a couple of years ago and the banks are relatively healthy," he said. "We need to put the liquidity out in the form of loans. So what you are seeing is a lot of hyper competition among the banks that makes terms for borrowers very attractive with historically low interest rates but also terms that make borrowing far easier for a borrower.