Data collected by a GVSU researcher indicates the West Michigan economy is continuing its slow pace with the possibility of a recession looming on the horizon.
Brian Long, director of supply chain management research at the Seidman College of Business, said three of the key metrics to his monthly survey of West Michigan firms and purchasing agents remained negative for the third consecutive month.
“Our closely watched index of business improvement, which we call new orders, is down for the third consecutive month,” Long said. “In addition, the comments that we are getting from our survey’s participants are growing increasingly pessimistic.”
Long said the West Michigan automotive industry has been hit particularly hard as more manufacturers pull back from pursuing the development of electric vehicles.
“Our main cyclical industry in West Michigan is automotive, and weaker business conditions among our automotive parts suppliers is the main reason that our local survey has turned negative,” Long said. “In particular, many firms got tied into the evolving EV market, and the manufacturers are now canceling orders.”
Complicating Long’s analysis are the conflicting data and metrics from local and national sources. Long said while respondents to his survey are pessimistic about the state of the West Michigan economy, other data points suggest strong consumer confidence at the national level.
“We're currently getting a lot of mixed signals about the direction of the economy,” Long said. “Interest rates are up, but inflation remains high. The employment index for our local survey is up, but the unemployment rates posted by Lansing are up. Unemployment is rising, but we still have firms complaining that they can't find the people to fill their open positions.”
Here’s a look at the key index results from August’s survey of West Michigan businesses:
- New orders index (business improvement): -23 vs. -18 in July
- Production index (output): -10 vs. -16 in July
- Employment index: +7 vs. -3 in July
- Lead times index: -18 vs. -8 in July
More information about the survey and an archive of past surveys are available on the Seidman College of Business website .
