West Michigan’s economy remained in growth mode at mid-year, as a monthly industrial activity index recorded improvements in most categories.
Key indexes for sales, production and purchases all rose for June from the prior month, according to economist Brian Long’s latest survey of industrial purchasing managers in Grand Rapids and Kalamazoo. The only decline was in employment, which dipped slightly from May but remained strong amid low unemployment and tight labor markets.
“So far, so good,” Long, director of supply chain management research at Grand Valley State University’s Seidman College of Business, wrote in his July report on the monthly survey. “For the short term, the economy still has plenty of positive momentum. Barring a geo-political catastrophe, the positive impact of the recent tax cuts will keep the economy growing.”
Long’s report noted that unemployment rates of 2.7 percent in Ottawa County and 2.9 percent in Kent County were the lowest in the state. Comments in the June survey “remain positive,” although many respondents “are justifiably concerned about an impending tariff war.”
What Long called “trade war rhetoric” remains a constraining factor on the West Michigan economy, along with the inability to hire more workers, various material and logistical shortages, and rising prices.
“Hopefully, wiser minds will prevail and we will begin to see signs of at least some trade issues being resolved,” Long wrote.
2018 began with the expectations of another year of slow growth for West Michigan, he said. However, conditions for automotive suppliers remain strong. The office furniture industry “is now receiving a new wave of sales” and capital equipment makers have benefitted from federal tax reform enacted at the end of 2017, according to the July report.