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Tuesday, 05 May 2015 14:56

West Michigan economy grows amid potential challenges

Written by  MiBiz Staff
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Despite a relatively slow start to the first quarter of 2015, regional companies have begun to see marked improvement in their businesses as the overall economy continues improve.

That’s according to the latest Current Business Trends report published by Brian Long, director of supply chain management research for Grand Valley State University.

“Overall, this report is the best we have filed in about a year,” Long stated in the report. “Not only has spring arrived, but the veiled pessimism that tainted last month’s reports has generally dissipated.”

In particular, the index of new orders jumped from 13 in February to 29 in March, according to the survey. Of the companies polled, 45 percent noted that they’ve seen their new orders increase. Similarly, production activity has also risen to an index of 35, up from 18 the previous month.

The growth has driven improvement in the majority of industry sectors including automotive, office furniture and industrial distributors, according to the report.

However despite the economic growth in the region, several challenges may prove troublesome in the future. In the near-term, the West Coast port strike has continued to dog many West Michigan manufacturers as those companies struggle to maintain inventory levels, according to the survey.

Falling steel prices have prompted some smaller mills to cease operations and — in some cases — permanently shut down. Those shutdowns have led industry insiders and executives to raise concerns about steel shortages when the commodity markets pick up.

Despite the potential challenges on the horizon, the short-term outlook of executives surveyed increased significantly from an index of 18 in February to 32 in March, according to the report.

“It may have just been the fatigue of winter finally wearing of, although the same uptick in optimism may also be found at the national and international levels,” Long said in the report.

Read 1098 times Last modified on Thursday, 07 May 2015 10:51

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