West Michigan’s industrial economy flattening
April Institute for Supply Management Research Survey says local business conditions fall in line with the national economic trajectory. What does that mean for employment heading into the summer months?
Purchasing managers from West and Southwest Michigan responding to the April Supply Management Survey revealed the economy is softening. The local office furniture business is cooling. And while pent-up demand for cars and trucks has benefited West Michigan’s auto parts suppliers, Brian G. Long, director of Supply Management Research in the Seidman College of Business at Grand Valley State University sees weakness.
“For the last few reports, we've noted that our index of employment has remained relatively strong, primarily because of some of the responding firms saying that they were back filling positions that have been open for sometimes months. Well, according to this month's report, we may have not only filled those open positions, but some firms are now starting to worry about the future course of the economy.”
While survey reporting companies say they’re adding jobs, Long expects that to ebb heading into the summer months.
“If we do slide into a recession later this year, I can't think of a recession in the last 50 years that we've had this much advance notice. Hence, with most of the economy beginning to brace for some kind of a potential storm, just like any storm, the impact may be a slowdown rather than a shallow recession.”
That’s if the Federal Reserve’s interest rate hikes can get inflation under control while at the same time not cooling the economy too much. That’s the best-case scenario. After last month’s collapse of a handful of regional banks, the question is are there more to follow? If so, is it the bursting bubble or ‘black swan’ event sending the U.S. economy into recession.