GVSU economist: Marginal growth continues
Posted on October 09, 2019
The growth rate of the West Michigan industrial economy improved again for September, said Brian G. Long, director of Supply Management Research in Grand Valley State University's Seidman College of Business.
Long surveyed local business leaders and his findings below are based on data collected during the last two weeks of September. View the full report.
The survey's index of business improvement (new orders) edged up to +6, from +3. The production index moved down to +6, from +9. The index of purchases dropped to -6 from +2 and the employment index rose to +8 from +1.
Long said after three months of pessimism, there is a note of encouragement in September’s local index of employment.
"Numerous headlines proclaimed the national unemployment rate fell to 3.5 percent in September, a 50-year low," he said. "However, the UAW strike and the apparent softening auto market has brought Michigan’s August (latest month available) unemployment rate up to 4.2 percent from 3.9 percent in August 2018."
Long said cities where General Motors plants are located are feeling most of the heat from the UAW strike, but a few local firms who sell to GM could begin to see layoffs if the strike continues into November.
Looking ahead, Long said despite economic trouble spots all over the world, he doesn't see an obvious event that would trigger a recession; an exception is the U.S. trade war with China.
"Although the industrial markets are squirming because of falling exports and tariff-related price increases, the current signs still point more toward stagnation rather than a recession," he said. "A sudden announcement that the U.S. and China have reached a long-term trade deal could spark a new round of growth, but the Chinese government may be holding out until after the 2020 election for a better deal."
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."
For more information, contact Brian Long at (269) 870-0428.