Current business trends: growth rate remains good

Posted on

The economic growth rate in West Michigan is good but has moderated, according to Brian G. Long, director of Supply Management Research in the Seidman College of Business at Grand Valley State University.

Long surveyed local business leaders; his findings are based on data collected during the last two weeks of June.

The survey's index of business improvement, called new orders, backtracked to +19, from +31. The employment index came in at +20, a little below the previous month of +24. The production index eased to +16 from +29, while the index of purchases bucked the trend and rose to +24 from +19.

Long said the West Michigan economy remains on a solid footing, but the growth rate has tapered off because the summer months are often slower for local industries.

"Our survey participants have also taken on a tone of moderation," said Long. "Although certain segments outside of the industrial market, such as new home construction, have picked up, many local industrial firms are at capacity and can only contribute to the economic expansion by adding capacity. The expansions now unfolding by some of our local firms is the reason that the index of employment has remained in double digits for the past 18 months."

Long said while short-term business optimism faded a little over the past month, the long-term outlook remained unchanged. 

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.

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

DOWNLOADABLE AUDIO

* Long said the moderation or slowdown was expected for a few reasons (audio).

* Long said the unemployment rate is very good locally and statewide (audio).

* Long said short-term business optimism faded because of geopolitical events (audio).

* Long said summer jobs will help the summer economic numbers (audio).