Growth slows in West Michigan as auto sales fall, economist says

GRAND RAPIDS, MI – Growth began slowing for West Michigan manufacturers in June as the auto industry’s declining sales begins to take hold, according to Brian Long, director of Supply Chain Management Research at Grand Valley State University.

“After six months of disappointing car sales, the impact on our local auto parts suppliers is finally being felt by the West Michigan economy,” said Long, who conducts monthly surveys of industrial purchasing managers in the Grand Rapids and Kalamazoo area.

“It’s not a collapse, just a modest tapering of the growth rate,” said Long, who said his index of new orders fell after showing strong growth for most of 2017. His purchasing index and production index also showed signs of slowing down, he said.

“The decline in auto sales justifiably concerns our local auto parts suppliers, but so far, the decline remains fairly orderly,” he said. “At least some of the firms have been cushioned by new business from the transplant companies.

“Furthermore, any slump in the auto parts business by itself will slow the West Michigan economy but not push us into a recession.”

Auto parts suppliers in West Michigan reported mixed results, depending on which car or truck lines they were making parts for, Long said. The office furniture industry remained stable, he said.

“For non-industrial firms, many segments of the West Michigan tourist industry are poised to have a record year and the agricultural industry will have a good year as well, assuming the weather for the remainder of the season cooperates,” he said.

Long said local business leaders remain optimistic about the local economy for the short term and long term. His long term outlook survey was the highest it’s been in three years, he said.

Thanks to a low unemployment rate, Long said industrial firms continue to struggle to find employees.

“The latest data from Michigan’s Department of Technology Management and Budget shows the estimated unemployment rate for June, the latest…

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