Brian Long

November 04, 2009
By: Brian J. Bowe

GRAND RAPIDS, Mich. -- The greater Grand Rapids economy continues to show signs of recovery, according to a survey compiled by Brian G. Long, director of Supply Management Research in the Seidman College of Business at Grand Valley State University.

Results of the survey, conducted the last two weeks of October, show that the index of new orders rose to +36, up from +31. The production index remained positive, but backtracked to +29 from +38. Activity in the purchasing offices moderated to +21, down from +24. The index of employment rose modestly to +17 from +14. For the third successive month, 31 percent of the firms responding to this survey reported that employment levels are rising. This is offset by 14 percent of the respondents who are still cutting jobs.

"All in all, our statistics continue to be very positive. For this survey, we are now in our seventh month of recovery," Long said.
    
Long said much of the current economic strength can be attributed to the auto parts suppliers, which has spilled over to the industrial distributors which serve the auto industry. But, he added, non-automotive distributors continue to struggle. The capital equipment firms turned in a mixed performance for the month, as did the major office furniture companies.

Michigan's 15.3 percent unemployment rate continues to be a problem, Long noted. "Employment is a laggard in all recessions. Looking at previous recessions, we find that the unemployment rate continued to climb for 12-18 months after the economists trumpeted that the recession was over. The jobs will eventually come, but the wait may be painful."

The Institute for Supply Management, Greater Grand Rapids 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 conduced 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.

Call Brian J. Bowe at (616) 331-2221 or e-mail boweb@gvsu.edu to arrange interviews with Long.

AUDIO CLIPS

• Long says this is the seventh month in a row that statistics have improved (audio clip)
• Long says the automotive industry is a key indicator of the recovery (audio clip)
• Long says while the automotive industry has shown improvement, numbers may never get back to what they used to be (audio clip)
• Long says studies indicate people still prefer to drive themselves and are driving long distances, which will help automotive sales (audio clip)

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