According to the survey’s results, new orders fell to -57, down from -32. The production index dropped to -43, down from -30. The index of purchases sank to -59 from -40. The employment index modestly recovered to -38 from -43.
“Unfortunately, there is no way to sugarcoat this situation,” Long said. “By a considerable margin, this is the weakest performance in the 20-year history of this report,” Long said. “To make matters worse, there is little prospect that next month's report will look better.”
Long said the only oasis of stability is among firms relating to defense, aerospace, or mining equipment. The office furniture and auto industries continue to decline.
“For this recession, there isn't much of anyplace to hide,” Long said. “Unlike past recessions, this recession is definitely worldwide, and some form of a worldwide recovery will be necessary before we can declare the recession to be approaching an end.”
He added: “For the short run, we are in for a very rough ride. Locally, the good news, if you can call it that, is that the west side of the state will probably continue to fare better than the east side. Despite the bailout of Chrysler and General Motors, the crisis in the automotive industry is still far from over. In the Great Depression, many government actions made the problems worse. Today, our government in cooperation with other governments around the world, and the Federal Reserve in cooperation with central banks around the world, are working toward a large package of positive solutions. An economic stimulus package will certainly help, but only if it is targeted to the right segments of the economy. If the stimulus package turns out to be composed of too much pork, all bets are off.”
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 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 [email protected] to arrange interviews with Long.
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