GVSU economist: Marginal growth returns in West Michigan


GRAND RAPIDS — After last month’s dip, the pace of the West Michigan industrial economy returned to a very modest growth rate, said Brian G. Long, director of Supply Management Research in Grand Valley State University’s Seidman College of Business.

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) recovered to +3, up from -13. The production index bounced up to +9, from -15. The index of purchases flipped back to +2 from -6 and the employment index edged to +1 from -1.

Long called the trade war with China a two-edged sword. “The news media has highlighted the impact on farmers, which has resulted in falling prices for corn, soybeans, pork and other agricultural exports,” he said. “Many West Michigan industrial firms have come to rely on a wide range of industrial commodities subject to new tariffs that are driving up prices.”

Long said initially, many Chinese exporters were willing to accept lower prices in orders to retain the business relationship. “Both buyers and sellers believed the governments of both countries would soon reach an agreement, but that was 18 months ago, and now the rhetoric has turned pessimistic,” he said.

The world economy continues to slow, and the U.S. will eventually be drawn into the slowdown, Long said.

“The world political situation is a mess. The impending U.K. ‘hard’ Brexit could destabilize both the British and the European economies. Italy, France and Germany are dealing with populist uprisings. And, the U.S. is starting to focus on a major election that is still 14 months away, ignoring other problems,” he said.

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.”


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