GVSU survey shows declining economic confidence in West Michigan
According to Brian G. Long, director of supply management research at Seidman College of Business, fixed purchase rates, persistent supply chain issues and inflation have made business leaders pessimistic about the future.
Long says that for the first time in eight years, survey respondents reacted negatively to long-term business prospects. The Institute for Supply Management survey is a monthly survey of business conditions that includes 45 purchasing managers in the Grand Rapids area and 25 in Kalamazoo.
“We saw a dramatic decline in May as people in our survey indicated they weren’t as positive about the economy as they used to be,” Long said. “We fear that if this trend continues, it will mean hiring fewer people, buying less equipment and seeking fewer orders if they expect a recession to come.”
Overall, most survey respondents still reported slightly positive sales, but higher prices, rapidly rising transportation costs and logistical bottlenecks have reduced profits for many companies. Most expansion plans are now on hold, Long said, and many companies continue to struggle with staff shortages.
Highlights of Long’s report are listed below:
New orders in May fell to +14, from April’s index of +29
Production fell to +7, from April’s index of +23
May employment was +12, April index was +14
The purchase index remained stable in May, against +20 in April
Survey respondents come from the region’s leading manufacturers, distributors and industrial service organizations. The West Michigan survey is modeled after a national survey conducted by the Institute for Supply Management. Each month, respondents are asked to rate eight factors as “same”, “up” or “down”.