West Michigan Economic Growth Still ‘Modestly Positive’

GRAND RAPIDS — The West Michigan industrial economy continues to experience modestly positive 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 March. The survey’s index of business improvement, called new orders, was virtually unchanged at plus 15, down from plus 16. The was also little change in the production index, which edged up to plus 13, from plus 12. The employment index rose to plus 15, from plus 13.

Index levels above zero indicate economic growth, and the farther above zero the stronger the growth.

Long said there continues to be little change in the economic pattern in recent months. “Many of our local automotive parts producers are at or near capacity, so we cannot expect much more expansion out of this group,” he said. “Just as last month, the office furniture business is still flat or even slow for specific furniture types. The capital goods firms turned mixed in February, and remained mixed in March. However, most of the industrial distributors had a good month.”

Long said skyrocketing gas prices will not bring about another recession.

“Many economists have used $4 per gallon as a tipping point,” he said. “But, this is a country where consumers spend $15 billion per year on bottled water. We spend billions at Starbucks for morning coffee. Up to a limit, increased gas prices can be absorbed. After all the complaining is over, if we stay at $4 per gallon, the higher price will probably become the new norm, and people will build a life style around it. However, at $6 per gallon, we would encounter economic trouble because of the severe nature of the redefinition of our life style.”

Long noted that this month marks three full years since the recovery from the Great Recession began in the Greater Grand Rapids area.

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 www.gvsu.edu/scblogistics.


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