GVSU economics expert: Local recovery hits a peak
The West Michigan economy jumped into 2021 on a very positive note. Typical of most recession recoveries, nearly all statistics reflect the pent-up demand created over these past months, said Brian G. Long, director of Supply Management Research in Grand Valley's Seidman College of Business.
“This month’s spectacular statistics are the result of pent-up demand and should not be taken to mean we are entering a new wave of economic euphoria,” said Long. “Also, keep in mind that there are still many firms not sharing in the recovery.”
Long surveyed local business leaders and his findings below are based on data collected during the last two weeks of January.
The survey's index of business improvement (new orders) jumped to +57, up from +31. The production index bounced to +52, up sharply from +33. The index of purchases closed out the year at +26, up from +9, and the employment index rose to +20, up from +11.
Long said President Biden’s administration has issued many new directives that, so far, have not had any direct impact on the current pace of the recovery for auto parts producers or the office furniture industry. He said if the new stimulus package addresses the problems of the airline industry, it will be good for the long-term survival of local aerospace firms in West Michigan.
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.