GRAND RAPIDS – West Michigan’s economy continued to expand in April, but rising oil prices, tariff uncertainty and growing fears about a broader national slowdown are beginning to cloud the outlook across the entire state of Michigan.

That was the takeaway from the latest monthly industrial survey by Grand Valley State University economist Brian Long, who said West Michigan manufacturers remain cautiously optimistic even as geopolitical tensions and higher energy prices inject new uncertainty into the economy.

“Our statistics from our West Michigan Industrial Market survey came in positive, but the mood among survey respondents remains cautious and, to a certain extent, chaotic,” Long said.

The April survey showed West Michigan posting its third consecutive month of growth, although the pace slowed in some areas compared with March.

Key April survey results included:

New orders index (business improvement): +15, down from +26 in March
Production index (output): +22, up from +16
Employment index: +13, up from 0
Lead times index: +22, up from +

Long said the biggest concern now centers on the rapidly rising cost of oil after conflict escalated in the Middle East and Iran threatened shipping through the Strait of Hormuz — one of the world’s most important oil transit routes.

“In the broadest sense, the price of oil is reflected in the price of almost everything that we buy,” Long said. “Even a loaf of bread has to be delivered by a truck that probably burns diesel.”

That warning carries major implications for Michigan, where manufacturing, transportation, agriculture and automotive production remain deeply tied to energy costs.

West Michigan Holding Up Better Than Other Regions

Compared with much of the state, West Michigan continues to show relative economic resilience.

The region benefits from a diversified manufacturing base that includes office furniture, industrial equipment, food processing, medical devices and automotive suppliers. Companies tied to defense contracts and industrial automation also continue reporting relatively stable demand.

By contrast, Southeast Michigan faces mounting pressure from the automotive sector as consumers pull back on major purchases amid rising gasoline prices, high interest rates and concerns about inflation.

Automakers including General Motors, Ford Motor Company and Stellantis are confronting slowing EV demand, elevated inventory levels and growing uncertainty surrounding global supply chains and tariffs.

Michigan’s auto suppliers — many concentrated in Oakland, Macomb and Wayne counties — are especially vulnerable because they operate on thinner margins and are highly sensitive to fluctuations in production schedules.

“If vehicle sales soften even modestly, suppliers tend to feel it first,” said several Southeast Michigan economists in recent manufacturing reports.

Central Michigan Facing Mixed Conditions

Central Michigan’s economy remains more stable than heavily industrialized Southeast Michigan, but cracks are beginning to emerge there as well.

The region depends heavily on agriculture, food processing, health care, logistics and education sectors. Rising diesel and fertilizer costs are creating concern among farmers already operating with compressed profit margins.

Michigan farmers are also watching global tariff tensions closely because export markets for soybeans, corn and other agricultural products could weaken if trade disputes intensify.

Communities around Lansing continue benefiting from state government employment and education-related spending connected to Michigan State University, helping buffer the region against a sharper slowdown.

Still, economists say sustained gasoline prices above $5 per gallon nationally could weaken consumer spending throughout Mid-Michigan by late summer.

Northern Michigan And Upper Peninsula More Vulnerable To Tourism Slowdown

Northern Michigan and the Upper Peninsula face a different challenge: tourism sensitivity.

Higher gasoline prices often translate directly into fewer discretionary trips, shorter vacations and reduced spending at hotels, restaurants and seasonal businesses.

Tourism operators across Traverse City, Petoskey, Mackinac Island and the Upper Peninsula are already watching fuel prices carefully heading into the peak summer travel season.

A family driving from Chicago or Detroit to Northern Michigan can now spend hundreds more on fuel compared with just a few years ago.

That matters because tourism remains one of the dominant economic drivers across large portions of Northern Michigan and the U.P.

The Upper Peninsula also faces ongoing population decline and workforce shortages, making it more economically fragile during periods of national uncertainty.

Logging, mining and shipping industries across the U.P. could additionally face higher transportation and fuel costs if oil prices remain elevated through the summer.

Tariffs And Global Instability Add New Risks

Beyond energy prices, Michigan businesses are increasingly worried about tariffs and geopolitical instability.

Long said uncertainty itself often becomes an economic drag because companies delay investments, postpone hiring and slow expansion plans until conditions stabilize.

That concern is especially important in Michigan because the state’s economy remains heavily integrated into global manufacturing supply chains.

Many Michigan manufacturers rely on imported steel, aluminum, electronics and industrial components. Additional tariffs or shipping disruptions could raise costs even further.

Lead times — one of Long’s key survey metrics — rose sharply in April, a potential warning sign that supply chain bottlenecks could be re-emerging.

While the West Michigan economy remains in expansion mode for now, economists across the state increasingly believe Michigan could be entering a more fragile economic period during the second half of 2026.

Consumers are already dealing with higher prices for gasoline, groceries, utilities and insurance. If energy prices continue climbing while interest rates remain elevated, economists warn that business investment and consumer confidence could weaken further by fall.

For now, West Michigan remains one of the brighter spots in the state economy.

But the cautious tone emerging from purchasing managers suggests many businesses are preparing for a rougher road ahead.