GVSU economics expert: Local recovery stabilizes

The West Michigan economy remains on a positive footing, although time will likely show January was the peak of the COVID-19 recession recovery, said Brian G. Long, director of Supply Management Research in the Seidman College of Business. 

Long said most industrial firms have returned to near-full operations, although a number of challenges remain. 

“Although the automotive parts suppliers represent many of the recovered jobs, parts shortages are inhibiting auto assembly schedules,” Long said.

Most other industries are beginning to show signs of stabilizing, said Long. “Shipping schedules, especially from overseas suppliers, are still disrupted,” he said. “Prices are rising and recovering these higher costs from customers is difficult.”

Because of unemployment benefits, Long said some firms are reporting difficulty getting previous employees back to work, even by offering higher wages. 

“The markets are still buoyed by pent-up demand, which should keep our statistics positive for most of 2021,” Long added. “Like many recessions, many jobs were lost. Unlike other recessions, at least some new jobs were also created. It will take some time to sort out exactly where we stand.” 

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

The survey's index of business improvement (new orders) remained strong, but retreated to +33 from +57. The production index remained positive, but backtracked to +28 from +52. The index of purchases moderated to +23 from +32, and the employment index jumped to +31 from +20.

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.