GVSU economist: Outlook is positive for 2017

The West Michigan economy slowed for the month of December, which was expected, according to a Grand Valley State University economist.

Brian G. Long, director of Supply Management Research in the Seidman College of Business, said December is often a slow month for many industrial firms but the outlook for 2017 is positive. See his full report here.

"At the beginning of 2016, we faced numerous statistics that pointed toward a downward trend for the economy. The stock market took a nasty hit, and it appeared that we could be in the early stage of another recession," said Long. "But, that was last year. For 2017, we have a whole host of positive factors that predict a strong first quarter." 

Long cites 10 key factors:

• Consumer confidence has recently recovered to a 15-year high;

• Auto sales may taper off in 2017, but will still remain strong;

• Housing prices have finally recovered to the pre-crisis peak; 

• The GDP gain for the third quarter of 2016 came in strong at 3.5%;

• The Institute of Supply Management national purchasing manager’s index for December jumped 1.5 points to 54.7;

• The Purchasing Manager's Index (PMI) for China rose to 51.9 from 50.9, which is now the third month of positive growth;

• Canada, our largest trading partner, has returned to positive growth and posted a PMI of 51.8;

• The global PMI, now at 52.7, is considerably improved over the past year;

• The stock market is now in record territory.

• Business confidence in our local survey, as well as other surveys, is generally positive. 

 Long surveyed local business leaders and his findings below are based on data collected during the last two weeks of December. 

The survey's index of business improvement (new orders) came in at -5, below the +23 posted in September. The production index eased to +3, from +4. The index of purchases edged lower to +3, from +6. The employment index was positive at +7, up from -1. 

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.