The greater Grand Rapids industrial economy is experiencing slower
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 October. The survey’s index of business improvement,
called new orders, retreated to +9 from +25. In a similar move, the
production index edged lower to +8 from +25. The index of purchases
backtracked to +6 from +14. The employment index fell to +15 from +27.
“Slow growth by any measure is still better that no growth at
all,” said Long. “Our local statistics continue to be stronger than
the rest of the country, and even the rest of the world. We hope that
this trend will continue.”
Long said the automotive parts producers are keeping local
statistics positive; in October auto sales for the industry were up by
8 percent. He said the office furniture firms are still holding
steady, but the slowdown in the world economy is starting to erode the
prospect for future performance. He also said industrial distributors
are steady, but the slowing of the local economy has caused their
sales to moderate.
“Despite the modestly positive numbers in this local survey,
caution still remains that the world economy is still slowing and many
countries may soon slide into a technical recession,” said Long. “For
us, the big question remains about how much we will be drawn in if the
economy for most of the rest of the world turns slightly negative.
Barring an immediate collapse of the Euro, we still expect to see the
current pattern of slow growth to continue in West Michigan for the
next few months. If we do slide into another recession, chances are
this time we can blame it on the Europeans.”
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.
DOWNLOADABLE AUDIO
* Long said Europe's problems are coming back to haunt us and we have to wait for Europe to act (audio).
* Long said slower growth relates to problems with Social Security that date back at least 20 years (audio).
* Long said the problem started in Greece (audio).
* Long said the local economy will be OK because of the auto industry (audio).
