The greater Grand Rapids industrial economy continues to experience
modest growth, 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 August. The survey’s index of business improvement,
called new orders, remained positive but edged lower for the third
month in a row to +13 from +17. In a similar move, the production
index retreated to +17 from +21. The index of purchases eased modestly
to +21 from +23. The employment index backtracked to +26 from +37.
“Just as last month, our local statistics continue to be
stronger than the rest of the country,” said Long. “The second half of
the year is now looking less optimistic.”
Long said both the office furniture industry and automotive
parts producers are reporting business conditions to be the same — not
declining or advancing, just holding on to recent gains. For the
fourth month in a row, industrial distributors came in fairly
positive, but several firms are speaking of an impending
slowdown.
Blockbuster news came on August 5 when Standard and Poor’s
downgraded the U.S. debt for the first time in history. “What went
almost unnoticed is that the Federal Reserve and numerous economists
have downgraded their estimates for economic growth for the last half
of the year — some to near zero,” said Long. “Consumer confidence fell
again, and remains far below the levels of five years ago. Michigan
unemployment has ratcheted up to 11.9 percent, from 10 percent in
April. Our local surveys remain positive, but have continued to
flatten. In short, the specter of a double dip recession has
re-entered our economic vocabulary.”
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
www.gvsu.edu/scblogistics.
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