Local manufacturers are seeing the West Michigan economy flatten as sales across some industries have slowed and market demand has stabilized, according to a monthly survey conducted by a Grand Valley State University researcher.
Brian Long, director of supply chain management research at GVSU, said his August report shows several key indicators from July have flattened after fluctuating from the previous few months.
“Our most important index in our survey of purchasing managers is new orders,” Long said. “When new orders are coming in strong to just about any firm, they start buying more materials, more equipment, more industrial services and eventually of course, hiring more people, but the impact on the financial and employment statistics may not show up for weeks or even months.
“So right now, with most of our recent orders indexes turning in flat or stable, we have to declare that the West Michigan economy is stable, neither expanding or contracting.”
While the strong demand for cars and light trucks is helping the automotive industry prosper, suppliers in the office furniture sector are seeing their segment soften, Long said.
“Statistically, this month's survey of purchasing managers in West Michigan is about as flat as it can possibly be,” Long said. “However, it is our automotive parts producers that are holding us up. Other industries like office furniture are softening, but again, I say softening and not collapsing like we would expect in a recession.”
Here’s a look at the key index results from July’s survey of West Michigan manufacturers:
- New orders index (business improvement): 0 versus +9 in June
- Production index (output): -3 versus +6 in June
- Employment index: +7 versus +14 in June
- Lead times index: -7 versus -17 in June
More information about the survey and an archive of past surveys are available on the Seidman College of Business website.