GRAND RAPIDS — The West Michigan industrial economy remains marginally soft, and is poised for slower growth in 2020, a Grand Valley State University economist said Wednesday.

Brian G. Long, director of Supply Management Research in Grand Valley State University’s Seidman College of Business, surveyed local business leaders and his findings below are based on data collected during the last two weeks of January.

The survey’s index of business improvement (new orders) edged down to -9 from -7, but continues to be ahead of October’s much weaker -21. The production index recovered to -2 from -7. The index of purchases remained negative at -6 from -17, and the employment index fell to -7 from -2.

Long said the West Michigan economy is poised for a period of slower growth entering 2020. 

He said the tariff wars are not over, but there has been progress. The new tariff agreement with Canada and Mexico will correct some inequities that have popped up over the past 26 years.  “For West Michigan, the biggest beneficiaries will be our local auto parts producers who will have their tariffs to Canada reduced or eliminated,” he said. 

Long said some West Michigan farmers may benefit from the Phase I trade agreement with China. 

“Many of the tariffs that have disrupted Chinese pricing for many commodities and sub-assemblies for some of our local businesses are not included in the agreement,” said Long. “The agreement may contain a lot of loopholes that could allow China to fudge compliance numbers. In fact, it may be a year before we know if the agreement has actually done us any good.” 

Long said the coronavirus could slightly dampen the world economy. “The CDC tells us that a vaccine is still about 12-14 months away, so world travel and other measures to contain the spread may put a dent in the Chinese economy, as well as other economies around the world, including our own,” he said. 

The Institute for Supply Management survey is a monthly survey of business conditions that includes 45 purchasing managers in the greater Grand Rapids area and 25 in Kalamazoo. The respondents are from the region’s major industrial manufacturers, distributors and industrial service organizations. It is patterned after a nationwide survey conducted by the Institute for Supply Management. Each month, the respondents are asked to rate eight factors as “same,” “up” or “down.”

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