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Current Business Trends: Modest Growth

Posted on June 04, 2012

The greater Grand Rapids industrial economy is experiencing modest but slightly slower growth, according to the results of a monthly survey compiled by Brian G. Long, director of Supply Management Research in the Seidman College of Business at Grand Valley State University. 

The survey results are based on data collected during the last two weeks of May. The survey’s index of business improvement, called new orders, moderated to +20 from +24. The production index eased considerably to +5 from +25 and employment tapered off to +12 from +20.

Long said staff reductions were reported by 13 percent of local businesses. “Some firms are starting to liquidate the inventories they built over the past six months in anticipation of higher prices,” said Long. “Overall, our current statistics are still positive, but slightly less robust than what we would like to see. Even though the local economy is still growing, the future is starting to look less certain than it did a few months ago.”

Long said automotive parts producers should keep statistics positive for a few more months and the office furniture business remains soft, but there are signs several firms are stabilizing. He said business conditions remain positive for industrial distributors and the performance for capital equipment firms remains stable because of the uptick in the automotive industry. 

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.” An expanded version of this report and details of the methodology used to compile it are available at


* Long said at some point the automotive industry, which has carried the local economy, will hit a saturation point and will slow down (audio).

* Long said economists are worried about Europe and the "sovereign debt crisis" (audio).

* Long said local unemployment numbers have improved tremendously (audio).

* Long said consumer confidence surveys show consumers are confused (audio).

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