Survey shows economic growth for Grand Rapids area
College students across Michigan are feeling the pinch on their wallets from the bad economy, but students in the Grand Rapids area are better off than most as new research shows the economy is growing.
The Grand Rapids area industrial economy saw modest growth in December, according to a survey done by Brian G. Long, the director of Supply Management Research in the Seidman College of Business at Grand Valley State University.
“We’re just fortunate that we have very low areas of unemployment compared to other cities in the state,” Long said.
The Institute for Supply Management survey is conducted monthly by Long and his peers. The survey measures the business conditions of 45 purchasing managers in the greater Grand Rapids area and 25 in Kalamazoo. Every month, respondents are asked to rate eight different factors as the same, up or down.
One of the best findings in the current survey is the employment index, which had dropped to 0 in October of last year but was up to 9 this December.
Long said that people with degrees who are unemployed will have an even easier time finding jobs, as there is a lack of employees who have completed training in four-year and master’s programs.
“I went to school many years ago when they would hire a person with a degree and train them on what they are needed for, but that’s not the case anymore,” Long said. He added that employers now are looking to hire people who are ready to start work on day one with little need for training.
Numbers for the survey’s index of business improvement, called new orders, shifted from 16 to 5. The production index also dropped to 10 from 13 in November, but that number is in line with past December findings.
Although the employment numbers went up more than the production and business improvement numbers, the growth that the survey shows can be positive for producers and consumers.
“Primarily, a strong economy is good for everybody,” Long said. “What you’ve got is a strong base for people who are working and also a strong base for people buying retail.”
The survey also took a number of “outlook” statistics that didn’t vary much from previous months. The short-term business outlook index showed little change at 27 from 29 the month before while the long-term business outlook statistics saw no change and stayed at 53.
The survey also predicted the factors that will define the 2014 economy, which include: automotive, industrial inflation, interest rates, real estate, unemployment and Obamacare.
One of the main factors is the automotive industry, as West Michigan relies heavily on companies that produce automotive parts. The Affordable Care Act will also likely have an impact on the economy, but Long said that since the law applies to hospitals, drug companies and other medical firms, it should have very little impact on the automotive supply chain companies that the state relies on.