In the Grand Rapids area, the index for new orders returned to even last month, after falling into negative territory in July. The production index also moved positive in August after earlier dipping negative. The employment index remained unchanged and the purchasing index improved slightly, with both sitting positive in the single digits.
“In short, a slowdown is upon us, and it still remains to be seen just exactly how slow we are going to get,” Long wrote in his report in the Grand Rapids area.
The office furniture industry appears stable and despite strong auto sales, “there are still considerable questions about the automotive production schedules for the rest of the year,” wrote Long, director of supply chain management research at Grand Valley State University’s Seidman College of Business. Auto suppliers remain positive, “but none are showing the rapid expansion we have had for most of the last there years.”
In the Kalamazoo area, key indexes on the economy improved, although they still reflect slow grow, Long said.
“After two months of softer numbers, it seems obvious that the slowdown that we have been expecting is upon us,” Long wrote on the Kalamazoo-area economy.
The index for new orders improved but remained negative and the production index moved from negative to even. Indexes for employment and purchases both moved positive for August, after turning negative in July.
Industrial distributors “turned in a very widely mixed performance for the month” and capital equipment makers “could also best be described as widely mixed,” Long wrote. Comments from purchasing managers “are still generally positive, but more (there is) caution than just a few months ago.”
Long’s report comes on the heels of the latest Economic Activity Index from Comerica Bank, which showed June’s index jumped to its highest point in 10 years. June’s activity index rose two points to 105.9, the index’s highest level since 2002, according to the bank. The index in 2012 has been above the index average for all of last year.
Comerica Chief Economist Robert Dye said the rate of job creation slowed over the first two quarters, which coincided with a leveling off of U.S. auto sales, which most economist expect to reach 14 million to 14.4 million units. Michigan’s housing sales and prices are on the rise, and Dye expects new home construction to increase with pent-up demand.
“Outside of durable goods manufacturing, we are seeing ongoing gains,” Dye said in a statement.