West Michigan Economy Accelerates, Purchasing Managers Index Show

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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 experienced slow but accelerated 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 on behalf of the Institute for Supply Management Greater Grand Rapids Inc.

The survey’s index of business improvement, called new orders, advanced to plus 27 from plus 19. The production index rose to plus 20 from plus 18. The employment index jumped to plus 19 from plus 10 and the index of purchases advanced to plus 19 from plus 16.

The PMI is a diffusion index with a baseline of zero. A group of corporate purchasing managers is asked whether a variety of economic indicators is the same, lower or higher than a month earlier. The farther the index is above zero, the more managers answered that the indicators were higher. Figures below zero indicate that more managers answered that the indicators were down from a month earlier.

Long said the employment index provides a source of optimism.

“For March, our index rose to plus 19, the highest it has been since last summer,” said Long. “Part of the increase can be attributed to the recent increases in new orders, especially for those firms that are running enterprise software. Another factor relates to the new investments several of our local firms have made. However, smaller firms are still not participating in the expansion, resulting in the local unemployment numbers still being higher than satisfactory.”

Long said West Michigan is still faring much better that the rest of the state. Among the unemployment rates in the 83 Michigan counties, Kent County is second best, followed by Ottawa County at No. 3, and Kalamazoo County at No. 4.

Long added that auto sales continue to be the driving force behind the Michigan recovery. He said sales for the industry were up 6 percent, although car sales were only 1 percent and light trucks made up 11 percent of the total.

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.
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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