Current Business Trends: Still Improving

Brian Long
Brian Long
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GRAND RAPIDS, Mich. — The greater Grand Rapids economy continues to improve, according to a survey compiled by Brian G. Long, director of Supply Management Research in the Seidman College of Business at Grand Valley State University.                                     

Results of the survey, conducted the last two weeks of September, show that the index of new orders rose to +31. The new orders index tracks business improvement, and this is the highest the index has been since May of 2006. The production index fared better as well, rising to +38 from +34.  Activity in the purchasing offices moderated to +24, down from +33.  The index of employment remained positive for the second time in two years, although it sank to +14 from +19.  Just as last month, 31% of the firms that respond to this survey respondents reported that employment levels are rising.   
    
In individual industries, Long noted that new orders are still up for many of the auto parts suppliers, adding that “many of these firms are justifiably worried that production schedules will be cut if auto sales continue to slide.”  Long also noted improvements for industrial distributors while capital equipment firms remain flat.

The uncertainty in the auto sector casts a long shadow over the Michigan economy.

“We are in uncharted territory,” Long said.  “The international economy is improving, which is good for the U.S. and Michigan economies.  However, the most recent auto sales reports will probably put pressure on our auto parts producers in the near future if sales remain flat.  Although some of our other industries are starting to recover, it seems improbable that they can offset a decline in automotive enough to continue. The recovery will probably continue, but it may be slower and bumpier that we hoped.”  

The Institute for Supply Management, Greater Grand Rapids 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 purchasing managers from the region's major industrial manufacturers, distributors, and industrial service organizations. It is patterned after a nationwide survey conduced 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.

Call Brian J. Bowe at (616) 331-2221 or e-mail boweb@gvsu.edu to arrange interviews with Long.

AUDIO CLIPS:

Long says there are opportunities for the unemployed in Michigan (audio clip)

Long says overall this is an encouraging report (audio clip)

Long says while the report is positive, the automotive companies didn't post good numbers for September (audio clip)

Long says Grand Rapids is doing better than many other cities in our state (audio clip)