Current Business Trends: Slow growth continues

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The greater Grand Rapids industrial economy continues its slow 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 in the last two weeks of November. The survey’s index of business improvement, called new orders, was virtually unchanged at +15. In a similar move, the production index eased to +18 from +19. The index of purchases rose modestly to +16, up from +9. The employment index remained unchanged at +21.

Long said it is clear the greater Grand Rapids economy is still growing, but the pace has slowed from previous months. “We will probably end the year with slow growth, and should expect the slow pace to continue well into 2011,” said Long. “Much of the gloom and doom has subsided, but the pace of the recovery remains painfully slow.”

Long said new orders are up considerably for many office furniture firms and that automotive parts suppliers are still doing well. He said the stabilization of auto sales continues to help.

Long added that the recovery will be slower than any recession in the past 60 years because of four factors: a glut of unsold housing on the market, low consumer spending, tight lending policies of banks, and low business and consumer confidence.

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 purchasing managers 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 www.gvsu.edu/scblogistics.

DOWNLOADABLE AUDIO

* Brian Long says the office furniture industry has finally turned a corner (audio).

* Long says the recovery is slow because cosumer and business confidence is low (audio).

* Long says the housing market continues to struggle (audio).

* Long says Christmas holiday spending is expected to be strong (audio).