GVSU survey finds continued economic growth for West Michigan

A GVSU survey of West Michigan manufacturers reported a fourth consecutive month of modest growth in May, though signs of a softening labor market, declining consumer confidence and ongoing geopolitical uncertainty could challenge that momentum in the months ahead.

Brian Long, director of supply management research at GVSU's Seidman College of Business, said while the region's industrial economy remains positive, several indicators suggest businesses are becoming more cautious about future growth.

"The industrial economies at the local, national and international levels all appeared to be modestly solid," Long said. "Much of the recent enthusiasm from the survey respondents is apparently predicated on the optimism that the Iran war could be over at any moment, resulting in the economy bouncing to meet the good news."

The survey's new orders index, a key measure of business improvement, remained unchanged in May, while the production index declined from April but stayed in positive territory.

While Long's local measures of business confidence remain positive, consumer confidence on a national level is beginning to fade, which could eventually affect firms, he said.

"At some point, consumer confidence will get low enough that it'll spill over into the industrial economy," Long said. "At that time, businesses will start reassessing what the future looks like, and we are in more danger of having more and bigger layoffs."

State data does reflect a bump in the unemployment rate, but the current data points do not point to an imminent recession, Long added.

"Our West Michigan employment index for May has now turned slightly negative, and the official unemployment numbers that we are getting out of Lansing are about 1% point or so higher than they were two years ago," Long said.

"Now, we don't currently see a recession just around the corner, but the West Michigan economy is definitely going through some redefinition."

Here's a look at the key index results from May's survey of West Michigan purchasing managers:

• New orders index (business improvement): +15 vs. +15 in April
• Production index (output): +14 vs. +22 in April
• Employment index: -4 vs. +13 in April
• Lead times index: +22 vs. +7 in April

More information about the survey and an archive of past surveys are available on the Seidman College of Business website .