GVSU economist: More growth, pace improves

The economic pace for West Michigan picked up in the month of September, 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 September. See the full report here.

The survey's index of business improvement (new orders) edged up to +28, from +21. The production index rose sharply to +29, from +16. The index of purchases edged higher to +21, from +15, and the employment index improved to +29, up from +21.

Long said growth remains positive for most sectors in the West Michigan economy. 

"Although auto sales continue to soften, the decline has, so far, been very orderly. Business conditions for the local auto parts suppliers remain positive," Long said. "Although the office furniture business plateaued last year, the new tax incentives have continued to boost many segments of the industry. Local firms producing capital equipment are also continuing to benefit from the tax incentives enacted in late 2017."

Long said the tax cuts will continue to move the U.S. economy in a positive direction, but uncertainty about the trade talks will limit future economic growth. 

"Recessions have historically occurred when a proverbial 'bubble breaks.' The problem is identifying the bubble," Long said. "After the collapse of the housing market, it was obvious that the banks buried themselves in sub-prime loans. Today, we have several bubbles that are starting to form, but none of them appear to be great enough to upset the current economic momentum."

Long added the recent report of a new trade agreement with Canada and Mexico relaxed some of the fear of an international trade war. 

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.