A monthly economic report from a Grand Valley State University researcher suggests that West Michigan’s economy continues to slow, due in part to the recent United Auto Workers strike and rising Federal Reserve interest rates.
Brian Long, director of supply management at GVSU’s Seidman College of Business, said his survey shows growing pessimism among local manufacturers and businesses.
Several of the key indicators in Long’s report continued their downward trend in October. New orders, employment and delivery times have plummeted over the past month.
“It’s not too much of a surprise that our October numbers show a slight slowdown in West Michigan’s economy,” Long said. “Additional slowdown can be attributed to the UAW strike that affected some of our local businesses. But the strike is now over and the West Michigan economy is slowing, but that’s exactly what the Fed wanted to do to curb inflation.”
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In his report, Long said he did not expect an imminent recession, but noted that companies surveyed were preparing for an economic slowdown rather than a collapse. Many are feeling the pressure of the Fed’s higher interest rates, they said.
“For October, our local unemployment index recorded its first significantly negative reading since the pandemic,” Long said. “Although some of the slowdown may be related to the UAW strike, which of course has now ended, there is still ample evidence that the West Michigan economy is indeed slowing.”
Here’s a look at the key index results from the October survey of West Michigan businesses:
New Orders Index (Business Improvement): -13 versus -9 in September
Production index (production): -4 versus -5 in September
Employment index: -10 compared to 0 in September
Lead time index: -17 versus -13 in September
More information about the survey and an archive of previous surveys can be found on the Seidman College of Business website.
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