GVSU economist: Economic bounce continues for West Michigan

For West Michigan, the first quarter of 2018 has started on strong footing, said Brian G. Long, director of Supply Management Research in Grand Valley State University's Seidman College of Business. 

Long surveyed local business leaders and his findings below are based on data collected during the last two weeks of March. See the full report here.

The survey's index of business improvement (new orders) rose to +34, slightly better than last month's +32. The production index held steady at +31. The index of purchases jumped sharply to +37 from +22, and the employment index edged up to +19, from +16.  

"The bounce we reported last month has continued and the general mood remains optimistic," said Long, "but the pricing pressure brought on by the recently announced tariffs has added a new dimension of stress to many purchasing offices. We have not seen this level of price pressure in several years." 

Long said the "floodgates" of new orders were opened immediately after the corporate tax cuts were signed into law. He said the recent bounce in auto sales appears to have quelled the fears that local automotive parts producers may be starting to slow. 

Despite the shortage of labor, Long said several companies are still growing. "The strength of the economy has resulted in the office furniture industry holding steady," he said. "Although there are a couple of exceptions, most of our industrial distributors are participating in the uptick of business and almost all of the manufacturing firms still cannot find enough new workers to fill open positions." 

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.