GVSU economist: Slow start to 2019
Posted on February 06, 2019
The West Michigan economy flattened in January, signaling a slow start to 2019, 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 January. View the full report.
The survey's index of business improvement (new orders) edged down to -4. The production index, which had been as high as +33 in November, softened to +4. The index of purchases flattened to +3, and the employment index came in at +14.
"The overall business outlook is much more cautious than it was just a few months ago," said Long. "Several survey participants continue to voice concern over the price impact of the still unresolved tariff war with China. Others are cautious about the potential decline in auto sales. In contrast, firms associated with the office furniture industry remain watchfully optimistic."
Long said the national economy turned out stronger than expected to start 2019.
"It is possible that the 2017 tax cuts may have a little more room to run than we expected," he said. "However, the softening of the world economy will pull us in the opposite direction. The economy still has plenty of momentum to carry through the first two quarters of 2019 and quite likely beyond."
Long said more than 58 percent of the Wall Street Journal’s panel of 60 economists expect the next recession to start in 2020, and 2019 could turn out to be just another year of slow growth.
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) 323-2359.