ALLENDALE, Mich. — After conducting a survey in September, Grand Valley State University’s Seidman College of Business has come to the conclusion that a 'shallow' recession is on its way.
The school says that while West Michigan has seen their economy flatten for quite some time now, they haven't yet hit a recession—but it is coming.
Their stance comes from their latest monthly survey of purchasing managers that was released on Oct. 10.
In it, they found steady demand among automotive suppliers. It was offsetting more negative results in orders from sectors like the office furniture industry.
“Of our cyclical industries in West Michigan, our automotive parts producers are continuing to stay fairly busy," said Brian Long, Director of Supply Chain research at GVSU. "But not so much so with our office furniture companies and anything related to capital equipment where the markets are starting to soften—not collapse—just soften.”
Lower prices for items like metals and plastic resins will take months to turn into suitable consumer prices. Long says that energy costs could end up offsetting lower costs in some other areas.
Also in the survey, GVSU saw that the sales and new orders index was flat in September. This is after it was going into negative territory during July and August.
Production levels were also flat, with a majority of survey respondents reporting that the output was similar to the numbers in August.
This, including what has been in the national headlines and what he's heard from the region's industrial employees, has led Long to be 80% sure that a 'shallow' recession is on the horizon.
“The confidence situation has clearly worsened the short-term business outlook index for September,” Long said. “However, the long-term business outlook, which queries perceptions for the next three to five years, still remains positive, just not nearly as strong as it was six months ago.”
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