Local economy continues slow growth

"Still growing, but slower" is how a Grand Valley State University economist described the West Michigan economy for October. 

Brian G. Long, director of Supply Management Research in the Seidman College of Business, surveyed local business leaders and his findings are based on data collected during the last two weeks of October.

See the full report here.

The employment index flipped back to positive at +5, up from -3. The survey's index of business improvement (new orders) remained positive, but edged slightly lower to +9 from +13. The production index retreated to +3 from +12, and the index of purchases rose modestly to +6 from +0.

"Even though the West Michigan economy has flattened, we are still modestly better off than the U.S. economy as a whole," said Long. "As long as sales for auto parts, office furniture and aerospace remain near record levels, the West Michigan economy should continue on the path of slow growth."

Long said the automotive parts producers are still near full capacity, although the rate of plant expansion seems to have slowed. He said the office furniture business is still near an all-time high, and local firms are still finding new ways to grow. The aerospace industry is smaller than automotive parts and office furniture, but new orders remain driven by the major players in the industry like Boeing and Airbus. 

Long said one weak spot that may be emerging is the capital equipment industry, where foreign competitors are discounting prices because of the softer sales in China and Western Europe. Local industrial distributors reported business conditions to remain on track, with no major problems. 

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 can be found in the dropbox link provided above under media note.

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