West Michigan Economy Shows Slight Improvement
GRAND RAPIDS -- The greater Grand Rapids industrial economy is experiencing slightly improved modest 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, rose to +25 from +13. In a similar move, the production index edged up to +25 from +17. The index of purchases backtracked to +14 from +21. The employment index almost remained unchanged but bumped up to +27 from +26.
"Locally, automotive parts producers are generally reporting business conditions to be improving, no doubt in response to the 10 percent improvement in auto sales for this month," Long said. "The capital equipment firms are also doing better than they have for the past two years."
Long said the office furniture firms are still holding steady, but the recent decline in business confidence is starting to erode the prospect for future performance. He said for the fifth month in a row, industrial distributors came in fairly positive.
"A recent survey of economists shows most believe there is a one in three chance of sliding into another recession, or a double dip of the 2007-2009 recession," said Long. "By the statistics in our current report, the odds are probably higher than that. However, the big problem is not with the United States but the rest of the world. It appears many places may already be in a recession. If we do slide into another recession, it will be the fault of the European debt crisis."
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.
