Published in Finance

Survey indicates soft industrial economy continues in West Michigan

BY Friday, February 07, 2020 05:00am

A monthly survey shows West Michigan’s manufacturing sector remained slow in January, although a couple of key indexes improved slightly from the prior month.

Still, each remained in negative territory for January, an indication that “the West Michigan industrial economy remains marginally soft,” according to economist Brian Long.


“Although the national and international economies appear to be edging slightly higher, the West Michigan economy is poised for a period of slower growth as we enter 2020,” Long, the director of supply management research at Grand Valley State University’s Seidman College of Business, wrote in his monthly report.

In results from Long’s January survey of 60 industrial purchasing managers in Grand Rapids and Kalamazoo, activity indexes for sales declined to negative 9, down two points from December. The index for employment declined five points to negative 7.

The index for production picked up from negative 7 to negative 2, and the purchases index improved to negative 6 in January from negative 17 in December.

Long noted that comments submitted with survey responses remained mixed, as they have for four months, although “more respondents are fretting about softening overall business conditions.”

Despite the negative indexes, the short-term outlook for the next three to six months among industrial purchasing managers posted a solid increase to 13, up from zero a month earlier. 

The long-term outlook for the next three to five years dipped eight points to a reading of 25.

“Because of the recent Chinese trade agreement and the signing of the ‘new’ NAFTA, now known as the USMCA, the current news cycle has added a modest degree of economic optimism as we go forward into 2020,” Long wrote.

Auto suppliers in the region should benefit from the new trade agreement with Canada and Mexico, he said.

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