GVSU Economist: Slow Growth Returns to West Michigan

GRAND RAPIDS. — The West Michigan economy is back on track with slow growth returning, according to a Grand Valley State University economist.

Brian G. Long, director of Supply Management Research in the Seidman College of Business, surveyed local business leaders and his findings are based on data collected during the last two weeks of June.

The survey’s index of business improvement (new orders) rose modestly to +6 from +0. In a similar move, the production index advanced to +11, up from +4. The index of purchases edged lower to -1 from +7. The employment index was unchanged at +12.

“We continue to see employment growth for West Michigan outpacing most of the rest of the state and nation,” said Long. “Our index of employment (+12) is well above the long-term average.”

Long said finished goods and raw materials continue to show inventory accumulations well above normal and the office furniture business remains stable for large establishments and is especially good for some smaller firms.

“The local auto parts suppliers are still doing well, but with U.S. auto sales only up 1.4 percent for the first seven months of the year, there is a sense that the market is now starting to top out,” Long said.

June sales for the industrial distributors came in mixed and Long said because of excess equipment being dumped on the world markets, capital equipment firms continue to report widely mixed results.

The Institute for Supply Management survey is a monthly survey of business conditions that includes 45 purchasing managers in the greater Grand Rapids area and 25 in Kalamazoo. The respondents are from the region’s major industrial manufacturers, distributors and industrial service organizations. It is patterned after a nationwide survey conducted by the Institute for Supply Management. Each month, the respondents are asked to rate eight factors as “same,” “up” or “down.” An expanded version of this report can be found in the Dropbox link provided above under media note.