West Michigan Economic Growth: Slow But Positive

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The downtown Grand Rapids skyline. WWJ file photo.

The downtown Grand Rapids skyline. WWJ file photo.

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The greater Grand Rapids-Kalamazoo-area industrial economy continues to grow slowly, according to the results of a monthly survey compiled by Brian G. Long, director of Supply Management Research in the Seidman College of Business at Grand Valley State University. 

The survey results are based on data collected in the last two weeks of May.

The survey’s index of business improvement, called new orders, moderated to +19, down from +29. In a similar move, the production index eased to +26 from +35. The index of purchases eased considerably to +25 from +51. The employment index remained fairly strong at +43, down modestly from +46.

In this survey, figures above zero indicate economic growth, while those below zero indicate recession; the higher the positive number, the faster the growth.

“Economics 101 tells us that employment is almost always a laggard,” said Long. “Given that many other indicators have pointed to slower growth for the second half of 2011, this month’s numbers are not a total surprise.”

Long said some projections now say the housing downturn may have further to go, and it could take eight to 10 years for a full recovery. He said the office furniture sector is still positive and most auto parts suppliers remain stable.

Overall, he said the performance for the industrial distributors came in fairly positive for the month. 

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 purchasing managers 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 and details of the methodology used to compile it are available at www.gvsu.edu/scblogistics.

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