Lansing-East Lansing

Lansing-East Lansing 2022 Economic Outlook

The Lansing area economy faced greater headwinds than the state over 2021 and in return, showed lower growth. However, we anticipate that 2022 will see a reversal in the Lansing area’s economy with relatively stronger employment and personal income growth. Lansing’s contribution to gross state product is expected to keep pace with the state for both 2021 and 2022. However, the components of Lansing’s income growth will differ from the state. Specifically, Lansing’s 2021 wage and salary income growth is expected to trail the state, but we anticipate that Lansing’s 2022 growth will exceed the state. Lansing will benefit from relatively higher rates of employment growth – driving wage and salary income growth. We anticipate that other components largely reflect expectations of the state. Lansing’s property-type income will strengthen in 2022 and transfer payments will dwindle.  

One of the leading factors contributing to Lansing’s employment gains is a relatively stronger manufacturing sector relative to the state. While the 2021 growth in Lansing’s goods producing employment is expected to lead the state, the region’s 2022 projected job losses appear muted compared to that of the state. For the Lansing area, a relatively strong construction sector is expected to further moderate goods production job losses. Of service sector jobs, we see Education & Health Services and Leisure & Hospitality sectors as significant growth leaders. Financial activities, including insurance, and Professional & Business Services sectors are also important contributors to job growth in Lansing.

In the aggregate, the Lansing area labor force, like that of the State, is smaller than it was before the pandemic. Do not expect a great deal of reentries in 2022. New workers to the economy are expected to be migrants moving into the Lansing area. Tepid employment growth and a constrained labor supply is expected to combine to reduce the area’s unemployment rate to around 3.5 percent in 2022. 

Updated December 28, 2021