GVSU economics expert: Recovery picks up steam, for now
With many West Michigan production facilities resuming marginal operations, the pent-up demand has brought economic statistics back closer to break-even, 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 June.
The survey's index of business improvement (new orders) came in at -7, considerably better than the -32 reported in May. In a similar move, the production index rallied to -11 from -35. The index of purchases recovered to -13 from -32, and the employment index rose to -13 from -38.
Long said many local manufacturing firms have resumed partial production schedules. He said statewide unemployment improved modesty to 21.2 percent from 24 percent, the third highest in the nation.
It appears the West Michigan automotive industry stands the best chance for recovery over the short term, compared to the office furniture and aerospace industries, said Long.
"The office furniture industry is still shipping orders that were placed before the crisis, so we don’t know what the October order books will look like," he said. "Home offices will become a bigger market in the future, but our local firms do not seem to have many entries for this market."
Long added the implementation of face masks and social distancing can allow for much of the manufacturing industry to reopen.
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.