The greater Grand Rapids economy is still going strong, but
moderating, 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 May. The new orders index, which tracks business improvement,
retreated to +40, down from last month’s near-record level of +51.
“All in all our recovery remains on track,” said Long. “However, it is
worth noting that depressed commercial and residential construction,
as well as the depressed pricing for all real estate will limit our
recovery.”
In other measures, the production index eased to +40 from +44.
The purchasing index backtracked to +28 from +39. The employment rose
to a four-year high of +27, up from +22.
Long said the automotive industry is still leading the recovery,
much as it has been since last year’s cash for clunkers program.
“Because of stronger production numbers in recent months, our
industrial distributors continue to show strength,” he said.
Chrysler led the way with a 33 percent gain, followed by Ford
with a gain of 22 percent. General Motors posted a more modest uptick
of 17 percent. “The Cash for Clunkers program of a year ago was the
turning point,” Long said. “Despite the controversy, Michigan would
now be far worse off had the program not been enacted.”
Long noted that although the office equipment industry is still
a laggard, there are now significant signs that business conditions
are now starting to improve for the first time in many months.
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 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.
DOWNLOADABLE AUDIO:
* Brian Long said this report shows good news for the office furniture industry (audio).
* Long said the Cash for Clunkers program helped turn the auto industry around (audio).
* Long said while controversial, the Cash for Clunkers program also helped turn the state economy around (audio).
* Long said overall Michigan's economy continues to recover (audio).
