GRAND RAPIDS, Mich. — The greater Grand Rapids industrial economy
is strong again, but moderating, 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 in the last two
weeks of June. The survey’s index of business improvement, called new
orders, retreated to +32, down from +40. In a similar move, the
production index eased to +30 from +40. But the index of purchases
rose to +36 from +27. Perhaps the best news, Long said, comes from
the index of employment, which set another four-year record at +36, up
from +27. [Audio clips available at bottom of story.]
Long noted that 46 percent of the firms in the survey are now
adding staff in the form of callbacks, new temps from temp service
companies, and new hires. “All in all, our recovery remains on
track,” he said. “However, it is worth reminding everyone that
depressed commercial and residential construction, as well as the
depressed pricing for all real estate, despite some recent
improvements, will limit our recovery.”
The automotive
industry is still leading the recovery, “but the pace has slowed just
a little,” Long said. “Many auto assembly lines are now approaching
capacity, which means that sales for some of our auto parts producers
are topping out.” In other sectors, the industrial distributors
continue to show strength and the office equipment and furniture
industries continue to show modest signs of recovery.
“Although several respondents are voicing concerns about the
future, the mood is still upbeat,” Long said. “The pace of our
recovery both here and around the world has slowed a little, but the
pace remains positive. There are still parts of the economy such as
residential and commercial construction that are causing us trouble,
but most sectors are now getting back on track and profitable, even
though the production levels of 2006 may still be many months away.
Long cautioned that the unemployment level remains unacceptably
high, but added: “Despite the rhetoric, there is very little that the
politicians can do to fix this problem, except get out of the way and
let the economy fix the economy.”
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 [email protected] to
arrange interviews with Long. NOTE TO RADIO: downloadable
audio bites are available below.
- Long says numbers for June were strong but are moderating [AUDIO]
- Long says growth will be slower but recovery will continue [AUDIO]
- Long says the index of the employment set another four-year
record [AUDIO]
- Long says there was good news on inflation on the industrial level which is helping local companies [AUDIO]
