GVSU economist: Double-digit growth continues

Despite signs that several local industries are topping out, West Michigan business conditions remain positive, according to a Grand Valley State University economist.

Brian G. Long, director of Supply Management Research in the Seidman College of Business, surveyed local business leaders and his findings below are based on data collected during the last two weeks of March. The full report can be found here.

The survey's index of business improvement (new orders) moderated to +21, down slightly from +25. The production index bounced to +31, up significantly from +17. The index of purchases rose to +25 from +19 and the employment index jumped to +21 from +12. 

"Overall, the first quarter of 2017 for West Michigan has ended on a strong note. At this time, the West Michigan economy shows no sign of backing down," said Long.

Long said the unexpectedly strong production index caused some firms to drive the raw materials inventories index down to +9 from +21. "The fear of more price increases, however, is still causing some firms to continue building inventory," he said.   

The spring season for office furniture is opening on a positive footing for most firms, as well as their Tier I suppliers, Long said. Some auto parts suppliers are still concerned about softening in auto sales. He said firms supplying light truck and SUV components remain much more optimistic, as do firms that are successfully selling to the numerous transplant manufacturers around the world. 

Long said the pattern of economic improvement has helped to maintain a positive outlook for West Michigan. For March, the Short-term Business Outlook, which asks local firms about the perception for the next three-to-six months, registered a small increase from +37 to +39. Looking out three-to-five years, the Long-term Business Outlook retreated to +42 from +47.  

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." 

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