GVSU economics expert: Local recovery strengthens
An old adage declares that a rising tide floats all boats. As the world economy continues to recover from the COVID-19 recession, the West Michigan economy has joined the parade, said Brian G. Long, director of Supply Management Research in Grand Valley State University’s Seidman College of Business.
Long said although the 2021 economy is poised to grow at the fastest rate in more than 60 years, questions about the 2022 and 2023 economies are beginning to emerge.
“So far, the current wave of industrial inflation has not spilled over to the consumer market, which has allowed the Federal Reserve to hold interest rates at near record lows,” said Long. “Consumer inflation has been partially held at bay by foreign competition. However, with prices simultaneously rising all over the world, it is questionable if the same rule will continue to hold.”
Long said although economic stimulus packages have seldom been very effective in the past, multi-trillion-dollar spending is boosting economic activity all over the world and will continue to do so for some time.
“When the money finally runs out, economic activity will decline,” he said. “We just don’t know by how much. Despite the unprecedented borrowing by the federal government, the U.S. dollar continues to hold its value in the world currency markets.” Long surveyed local business leaders and his findings below are based on data collected during the last two weeks of March.
The survey's index of business improvement (new orders) rose to +51 from +33. The production index edged up to +33 from +28. The index of purchases jumped sharply to +51 from +23, and the employment index rose to +40 from +31.
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.