West Michigan Economy Continues Advance
GRAND RAPIDS -- The West Michigan industrial economy is "up a little more," 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, came in at +23, up from February's +16 and up considerably from the 0 reported in January. (In this diffusion index, that means 23 percent more respondents reported increased orders vs. those who reported falling orders. Thus, readings above 0 indicate a growing economy, and the farther above 0, the faster the growth.)
In other components of the overall index, the production index came in at +22, up slightly from +21. The employment index rose to +26, from +22.
"The auto parts suppliers are still underwriting the strength of the Michigan economy," said Long. "The production schedules continue to be revised upward for some particular lines of cars and trucks, which generates optimism among local firms. The capital equipment firms are still widely mixed, but this month's bias is clearly to the up side. The office furniture firms are still positive, but the market shows signs of topping out or stabilizing at the current level. An improvement in the office rental market would help to boost sales."
Long said in early May, the debt ceiling will be reached and there will again be the possibility of a government shutdown. He also said it will take many more years before the unemployment rate returns to 5 percent, given that some economists are now suggesting 5 percent is the new norm.
"Not that many years ago, 5 percent unemployment was considered to be characteristic of a recession," Long said.
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.
An expanded version of this report and details of the methodology used to compile it are available at www.gvsu.edu/scblogistics.
For more information, contact Brian Long at (269) 323-2359.
