GVSU economist: Hints of slower growth

The West Michigan economy is chugging along like it has been for the past 10 years, but evidence is mounting that the pace may be slowing, 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 April. See the full report here.

The survey's index of business improvement (new orders) remained positive but backtracked to +13 from +17. The production index rose to +11 from +5, and the index of purchases also increased to +16 from +4. The employment index slid from +15 to a 27-month low of +4.

"Although one month can never be construed as a trend, it was disappointing to see our local employment index take such a deep slide," said Long. "Unemployment is always an economic laggard, resulting in most of our West Michigan counties continuing to post very good unemployment numbers." 

Long said although there are some significant signs that growth is slowing, there is still no sign that the economy is about to slide into a recession. 

"We know the world economy is slowing and that will ultimately have at least some impact on our domestic economy," said Long. "Various industries are starting to grow 'bubbles' which we hope will not all break at once."

The ongoing trade dispute with China could generate a significant slowdown or even a recession if the war drags on, Long said. Most major capital projects are planned and executed over a long-term cycle, such as five years. He said these projects tend to have long and productive supply chains which stimulate growth. He also said some of the benefits of the 2017 tax legislation could be felt for years to come, making the U.S. the cheapest place in the world to do business. 

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.