The Grand Rapids and Kalamazoo area’s industrial economy is again seeing moderate growth, 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  June. The survey’s index of business improvement, called new orders, edged up to +23 from +17. The production index was unchanged at +26. The index of purchases rose modestly to +29 from +25. The employment index moderated to +34 from +45.

“Statistics indicate that we are on track for continued economic growth, even though the rate of growth may slow in the second half of the year,” Long said. “The local economy is now in its 23rd consecutive month of expansion,  and it now appears the threat of a double-dip recession has passed.”

Long said this month’s big economic news is the passage of Michigan’s new budget for its 2012 fiscal year, which starts Oct. 1. The budget incorporates some of the biggest changes in taxation since the Hedley Amendment many years ago.

“The complicated Michigan Business Tax has been replaced with a simplistic 6 percent flat rate tax on profits,” explained Long. “This means the total cost of business will now be reduced just enough to keep some firms in business or from seeking more
favorable tax environments elsewhere. We should see some moderate improvement in the unemployment rate over the next couple of years.”

Long said the office furniture sector remains fairly positive and schedule reductions for automotive parts producers resulting from the Japanese parts shortages appear to be over and conditions look positive going into the summer months. He also said
industrial distributors came in fairly positive for the second month in a row.

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 and details of the methodology used to compile it are available at


Leave a Reply

Please log in using one of these methods to post your comment:

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

Watch & Listen LIVE