Michigan well positioned to weather recession
February’s Institute for Supply Management Research Survey reveals the area’s business conditions continue an overall softening.
The February Supply Management Survey revealed interest rate-sensitive businesses, including housing, are most impacted as the Federal Reserve raises interest rates as an inflation taming measure.
How well it’s working will be revealed March 14th when the government releases its latest Consumer Price Index which measures the change in consumer goods and services prices over a period of time.
“We are expecting that we're going to see some moderation as far as inflation is concerned. But again, moderation, not a serious drop, which means that interest rates are still going to continue to go up and it probably still means that we have to be on the lookout for a possible recession later in the year.”
Brian G. Long is director of Supply Management Research in the Seidman College of Business at Grand Valley State University. He says with so much talk of a recession, most businesses and individuals are prepared. The most recent survey of west and southwest Michigan Purchasing Managers hints at it. It also presents the state is well positioned to weather a recession.
“Those that are associated with our automotive industry are somewhat positive and somewhat optimistic as to what the situation is going to look like later in the year, there's still a lot of pent-up demand for automobiles and our automotive parts suppliers will probably keep our economy locally above the break-even point.”
The world economy is surprisingly in a similar situation. Long points to the JP Morgan International Survey that suggests that despite the war in Ukraine, global purchasing managers surveyed signal the global economy is at break-even.