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Purchasing Managers Find West Michigan Growth Modest

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The downtown Grand Rapids skyline. WWJ file photo.

The downtown Grand Rapids skyline. WWJ file photo.

(credit: istock) Technology Report
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GRAND RAPIDS — The West Michigan industrial economy continues to experience modest 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 during the last two weeks of August. The survey’s index of business improvement, called new orders, remained positive but edged lower for the third month in a row to +13 from +17. In a similar move, the production index retreated to +17 from +21. The index of purchases eased modestly to +21 from +23. The employment index backtracked to +26 from +37.

“Just as last month, our local statistics continue to be stronger than the rest of the country,” said Long. “The second half of the year is now looking less optimistic.”

Long said both the office furniture industry and automotive parts producers are reporting business conditions to be the same — not declining or advancing, just holding on to recent gains. For the fourth month in a row, industrial distributors came in fairly positive, but several firms are speaking of an impending slowdown.

Blockbuster news came on Aug. 5 when Standard and Poor’s downgraded the U.S. debt for the first time in history.

“What went almost unnoticed is that the Federal Reserve and numerous economists have downgraded their estimates for economic growth for the last half of the year — some to near zero,” said Long. “Consumer confidence fell again, and remains far below the levels of five years ago. Michigan unemployment has ratcheted up to 11.9 percent, from 10 percent in April. Our local surveys remain positive, but have continued to flatten. In short, the specter of a double dip recession has re-entered our economic vocabulary.”

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 the Kalamazoo area. 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 www.gvsu.edu/scblogistics.

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