Current Business Trends: Modest Growth

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The greater Grand Rapids industrial economy is experiencing modest 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 July. The survey’s index of business improvement, called new orders, edged lower to +17 from +23. The production index eased to +21 from +26. The index of purchases backtracked to +23 from +29. The only modest uptick this month came from the employment index, which rose to +37 from +34.

“Overall, local statistics are actually stronger than the rest of the country and we are still on track for continued economic growth,” said Long, “however, the second half of the year is now growing more questionable.”

Long said the uptick for the 2012 model year is well underway for automotive parts producers but production schedules for the rest of the year are not as optimistic as they were a few months ago. He said the office furniture market remains positive and for the third month in a row, industrial distributors came in fairly positive.  

Long added: “Congress has passed a framework for a modest deficit reduction package along with an extension of the debt ceiling. A promise for $6 trillion worth of reductions that was touted a few weeks ago was downgraded to a small fraction. As expected, creditors around the world were also expecting a more robust package and their displeasure has been reflected in the financial markets.”

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 www.gvsu.edu/scblogistics.

Call Dottie Barnes, Grand Valley News and Information Services, at (616) 331-2221 to arrange interviews with Long.