May Institute for Supply Management Research survey indicates concern a recession is nearing
For the first time in eight years, west and southwest Michigan purchasing managers signaled a pessimistic business outlook.
“This is at the short-term level and at the long-term level.”
Brian G. Long is director of Supply Management Research in the Seidman College of Business at Grand Valley State University. He says supply chain issues, flat purchasing rates, and inflation are ongoing problems. The concern is if the trends continue.
“Because this will wash over into all of the rest of the supply chain. In other words, they will hire fewer people. They will buy less equipment and they will probably be seeking fewer orders if they expect that a recession is in fact coming. And we have to be concerned about the attitude of business right now, because as I said, at least for West Michigan, it’s not very positive.”
That’s because two of west Michigan’s cyclical industries, office furniture and automotive parts manufacturing, are slowing. In particular, automotive production was down more than 31% over the last month due to a lack of computer chip.
While the outlook has turned negative here, Long says that’s not the case in other regions of the country with different industry mixes.