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West Michigan Economy Perks Up In September

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The downtown Grand Rapids skyline. WWJ file photo.

The downtown Grand Rapids skyline. WWJ file photo.

GRAND RAPIDS (WWJ) – The West Michigan industrial economy has returned to slow 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 September.

The survey’s index of business improvement, called new orders, flipped back to positive at plus 6, up from minus 4. The production index also turned positive at plus 2, up from minus 6. The employment index jumped from zero to plus 10, depicting a continuation of the employment growth in West Michigan.

The survey is a diffusion index with zero as the baseline. Respondents are asked whether a variety of economic indicators like sales and hiring are up, down or the same from a month earlier. The percentage answering higher moves the index that many percentage points above zero; the percentage answering lower moves the index that many percentage points below zero. Thus, the farther above zero the index is, the faster the economy is growing, and the farther below zero, the faster it’s shrinking.

Long said at this point, he is not too concerned about the effects of the government shutdown for Michigan.

“We will probably see little economic impact in Michigan unless the shutdown lasts more than a month,” he said.

Long said local firms are doing a credible job of managing inventories and — barring economic disruptions at the national or international level — the current trend of slow growth for West Michigan should continue. He said some auto parts firms say new business may not come until October or November when the major firms begin assessing the acceptance of their 2014 models and clarify their forecasts for the winter and spring selling seasons. Others are at full capacity, and see no change coming in the immediate future.

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. An expanded version of this report and details of the methodology used to compile it are available at http://www.gvsu.edu/scblogistics.

For more information, contact Brian Long at (269) 323-2359.

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