Local economy continues to improve

The economic growth rate in West Michigan improved for a second consecutive month in April, 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 April.

The survey’s index of business improvement, called new orders, rose to +37, up from March’s +29 and significantly higher than the +13 reported in February. The employment index, which has remained strong for the past year, remained virtually unchanged at +24. The production index remained strong, but backtracked modestly to +28 to from +35. The index of purchases eased to +32, down from +35.

"The West Michigan economy has shown two months of considerable strength, making the summer outlook very positive,” said Long. “Most of our industrial groups are continuing to show improvement. Our local auto parts producers continue attracting new business from many different nameplates around the world. With the seasonally slow period over, the office furniture business posted a stronger performance for April."

Long said April’s big economic news came from the Commerce Department’s report that the first quarter GDP for the U.S. came in at a 0.2 percent increase, down considerably from the 2.6 percent gain reported in the fourth quarter of 2014.  

“As we move toward the summer months, the momentum remains positive. However, we are always subject to the risk of geopolitical events, such as additional unrest in Libya, Yemen or Ukraine, and from ISIS,” said Long. “The financial markets and the news media continue to push these events further into the background, resulting in the stock markets to continue to set record highs. The Fed’s threat to increase interest rates, which was tentatively scheduled for June, now appears to be deferred to September, if then. So, there is at least a 95 percent probability that the recent economic improvements we have been experiencing will continue for the rest of the summer season.”

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.