A monthly survey of West Michigan businesses, conducted by a Grand Valley researcher, reveals the regional economy slowing for the fourth straight month.
Despite the downward trend continuing in September, Brian Long, director of supply chain management research at the Seidman College of Business, said a deeper analysis indicates the economy isn’t in a recession just yet.
“To help cool inflation, the Federal Reserve's higher interest rates have definitely slowed the economy, which is what's supposed to happen,” Long said. “At the national level, both of the major September surveys of the industrial economy have turned negative, but neither survey is negative enough to declare a recession at least yet.”
Several key indices in the GVSU survey remained negative, Long said.
“Our monthly survey of new orders for West Michigan, which is our closely watched index of business improvement, fell rather sharply in September for the fourth successive month,” Long said.
“Our index of production fell as well, and activity in our purchasing office, our index of purchases, fell at the sharpest rate since the beginning of the pandemic. But so far, most of these negative statistics can be attributed to our auto parts producers.”
Long said that many auto parts suppliers are still dealing with excess inventory, as car dealers struggle to move their stock of electric vehicles.
“What's interesting about this month’s report is that our statistics are soft and our anecdotal comments from many of our survey participants expect the economy to slow over the next few months, but then resume a normal course in early 2025,” Long said.
Here’s a look at the key index results from September’s survey of West Michigan businesses:
- New orders index (business improvement): -23 vs. -23 in August
- Production index (output): -28 vs. -10 in August
- Employment index: -11 vs. +7 in August
- Lead times index: -9 vs. -18 in August
More information about the survey and an archive of past surveys are available on the Seidman College of Business website.
