By Chris Knape
Grand Valley State University
West Michigan’s economy took an expected turn into a “shallow recession” as area manufacturers are reporting inflation-related headwinds and a slow-down in demand, according to an October survey of purchasing managers by Grand Valley State University’s Seidman College of Business.
Brian Long, director of supply chain management research at Seidman, said the downturn came as no surprise, with local results mirroring national ones.
“If we compare our statistics with those being collected at the national level, we see a pattern of economic erosion with higher interest rates around the world and the ongoing war in Ukraine,” Long said. “We can probably expect both our local and national statistics at the industrial level will probably continue to soften.”
The key new orders index made a turn into double-digit negative territory for the first time in 30 months, amid inflationary pressures, softening demand and uncertainty in the market.
Employment and purchasing indices also were in negative territory, with an increasing number of companies reporting investments in those areas were down versus the previous month.
Meanwhile, production, or gross output, grew during October as some manufacturers continue scrambling to meet demand in sectors like the auto industry, where supply chain issues have hampered business growth.
“Just like last month, the market for office furniture has continued to soften, but pent-up demand for new cars will most likely keep our West Michigan auto parts suppliers and the assembly lines running for the foreseeable future,” Long said. “The comments from our survey participants have now turned increasingly tenuous, and some firms are openly bracing for an impending recession.”
More information about this month’s survey results and an archive of previous survey data is available at the Seidman College of Business website.
