According
to the results of a survey taken in the last two weeks of January, new
orders remained negative at -28, but that's an improvement over the
previous month's -57. The production index is -38, up from last
month's reading of -43. The index of purchases rose to -53 from -59.
The employment remained nearly unchanged, at -36 this month compared
to -38 last month.
"All in all, it is a relief that we did not sink below last month's record low performance," Long said. "Furthermore, it was good to find that at least a few companies in our area had some new business come though the door after the first of the year. In fact, a few local firms are still actually hiring, even though not nearly enough to offset the job losses being reported by other firms."
Long said most estimates show that this recession will probably
parallel the 1981-82 recession, when unemployment rose to 10.8
percent. "At this time, all that most of us are hoping for is
some kind of sign that we are at or near the bottom," he said.
Now attention is turning to a stimulus package being pushed by
President Obama. "Unfortunately, there is little in the package
for the industrial side of the marketplace," Long said. "The
exceptions are those provisions that are targeted to infrastructure
renewal and expansion. Locally, this would mean that considerable
dollars would be spent to replace crumbling bridges, and re-pave or
expand existing streets and highways. From an economic standpoint,
investments in these kinds of infrastructure are almost always good
investments. In addition to employing many construction workers, the
supply chain consisting of products like cement, construction
equipment, and steel rebar will be stimulated at a time when these
industries desperately need it. Unfortunately, most of the money for
the stimulus package is being targeted at the consumer level, where it
will do little good."
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.
AUDIO CLIPS
Long says while the economy is still sinking, there was some good
news last month (audio
clip) He says companies reported improvements in January (audio
clip). He says this recession will mirror the recession of the
early '80s (audio
clip). He says Obama's stimulus package is more pork than stimulus
because it doesn't include many projects that can start quickly.
However, it does include construction projects for Michigan which is
good news (audio
clip). Long says Gov. Granholm's ideas outlined in her State of
the State address will not work in the current economy (audio
clip).
