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Current business trends slightly lower

Posted on August 06, 2012

For the first time since April 2009, the greater Grand Rapids industrial economy has slid into the minus column, 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 July. The survey’s index of business improvement, called new orders, came in at -6, down from +9. The production index also flipped negative to -5, down from +6. Employment remained positive at +18, but not as robust as the +25 in June.

“It is not a surprise to find that automotive parts suppliers are not sailing as high as they were a few months ago,” said Long. “Although July is a traditionally slow month for automotive, the September-October production schedules do not look as positive as they were once projected to be. As for the office furniture business, conditions are soft for some firms, but most are stable.”

Long said the GDP estimate of 1.5 percent for the second quarter of 2012, down from a revised growth rate of 2 percent in the first quarter, was big news. “By comparison, our average growth rate for the 2004-2009 time period was 3.95 percent. Our current rate of growth is well below where we need to improve the unemployment situation and to fully recover from the Great Recession,” he said.

Long added that the local economy could “dance back and forth across the zero growth line” for several quarters before finally resuming a slow recovery.  He said the local economy will be affected by the actions taken by Congress as the election draws near.

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

For more information, contact Brian Long at (269) 323-2359.


* Long said this is the first time since April 2009 the local economy has turned negative (audio).

* Long said there is no major trigger for the downturn (audio).

* Long said many small business owners are choosing not to hire (audio).

* Long said he believes the downturn has something to do with the soft European economy (audio).

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