This is the first recent month the local economy did not closely track with the national statistics, according to a survey compiled by Brian Long, director of Supply Management Research in the Seidman College of Business at Grand Valley State University.
The Greater Grand Rapids survey was conducted the last two weeks of May. The index of new orders, which tracks business improvement, remained positive at +5, up from +2. The product index retreated to -21 from -2. The employment index dropped sharply to -37 from -14.
“Last month’s declaration that it’s still too soon to declare the beginning of a recovery has come to pass,” Long said. “The signs of recovery may be at hand for the nation as a whole, but the bankruptcy of General Motors may have caused some of our local firms to step back and see where all of the chips may fall before moving forward.”
Long noted that the auto parts supplier is still Michigan’s weakest link, although business conditions for distributors were slightly improved. Three local capital equipment firms reported better business conditions. Most of the office furniture companies remain flat and most industrial groups reported that their production schedules are on the soft side.
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 BITES: Long says most purchasing managers in the area report "soft" conditions (audio clip ). Long says GM's filing for bankruptcy is good news for auto suppliers (audio clip ). Long says we should hope for positive consumer reaction to GM's announcement (audio clip ). Long added that Michigan's recovery will depend on consumer reaction to GM and Chrysler filing for bankruptcy (audio clip ).
