GVSU economics expert: Recession recovery picks up speed

The economic bounce that was expected for West Michigan has arrived, said Brian G. Long, director of Supply Management Research in Grand Valley State University's Seidman College of Business.

Long said the local index of new orders, the most important index, flipped to positive for the first time in several months.

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

The survey's index of business improvement (new orders) came in at +19, up from the +12 reported last month. The production index came in essentially unchanged at +13. The index of purchases remained unchanged at +10, and the employment index rose to +13 from -4.

Long said while some firms are still struggling, others are already back at full capacity. 

"A significant number of local firms have reopened and are doing just as well or better than they were before the recession began," he said.

Long said some local business owners report having difficulty finding enough workers, especially workers with specific skills. 

"If this trend continues, our unemployment rates will continue to fall," said Long. "That said, the recovery from every recession in recent memory has begun with a surge in pent-up demand. After the initial surge, we begin to see the permanent damage from the recession."

Long said pending a significant rise in COVID-19 cases, the current positive numbers should improve a little more for September. He added it will be difficult to know where the economy is headed until the November elections are done. 

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) 870-0428.