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West Michigan Economy Turns Slightly Negative

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The downtown Grand Rapids skyline. WWJ file photo.

The downtown Grand Rapids skyline. WWJ file photo.

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GRAND RAPIDS (WWJ) – The West Michigan industrial economy has turned slightly negative, 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, turned modestly negative at minus 4, down from plus 7 last month. The production index eased to minus 6 from plus 17. The employment index fell to zero from plus 21. That’s the lowest employment reading since January 2010.

“The ‘plateauing’ continues for local industrial groups,” said Long. “Despite industry predictions to the contrary, 2013 is not turning out to be a boom year for the office furniture business. Most firms are stable and profitable.”

Long said automotive parts producers are near peak production for the new model year and the recent strong auto sales reports bode well for the future. He said new business will probably not come to the auto parts industry until October or November when the major firms begin assessing the acceptance of their 2014 models.

“Because of the summer vacation season, many of our industrial distributors came in a little lower than expected,” Long said. With September comes a back-to-work sentiment for many firms, so distributors will probably see business pick up for September.”

The Institute for Supply Management survey is a monthly survey of business conditions that includes 45 purchasing managers in the 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 http://www.gvsu.edu/scblogistics.

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