While the recent turmoil in financial markets around the world triggered fears of a recession, a GVSU researcher said he’s not ready to make that declaration for the national or local economies.
Brian Long, director of supply chain management research at the Seidman College of Business, said his data indicates an economic slowdown and not a recession.
“All of our current numbers, and I underline current numbers, which flag a recession are still more emblematic of a slowdown, which is, of course, what the Fed is trying to accomplish with the higher interest rates,” Long said. “That could change with time, but right now, I don't see a big collapse in all of these different segments.”
Data from Long’s monthly survey of West Michigan purchasing managers points toward the West Michigan economy slowing with several key indices and measurements posting negative numbers in July.
His survey’s new orders index, a measure of business improvement, remained negative for the second straight month. The production index, a measure of a firm’s output, fell 14 points while the employment index dropped 13 points.
“One of the things the Fed watches closely is employment and conversely unemployment, so last week's weak jobs report is some of the first evidence we've seen that the higher rates are finally starting to slow the economy,” Long said. “Unfortunately, this jobs report was far softer than what was forecast, so the financial markets panicked.”
Here’s a look at the key index results from July’s survey of West Michigan businesses:
- New orders index (business improvement): -18 vs. -21 in June
- Production index (output): -16 vs. -2 in in June
- Employment index: -3 vs. +10 in June
- Lead times index: -8 vs. -18 in June
More information about the survey and an archive of past surveys are available on the Seidman College of Business website .
