GRAND RAPIDS – While headlines over the past several months have focused on tariffs, inflation and geopolitical uncertainty, one of Michigan’s most closely watched manufacturing indicators is telling a more optimistic story.
The latest Purchasing Managers Index from Grand Valley State University’s Seidman College of Business shows West Michigan manufacturers enjoyed their strongest month in five years during June. New orders, production and hiring all accelerated sharply, suggesting the state’s industrial economy has regained momentum despite higher prices, trade uncertainty and the lingering effects of the Iran conflict.
“Our survey of the West Michigan industrial market posted one of the best performances that we’ve seen in the last five years,” said Brian Long, director of supply management research at GVSU. “Several of our cyclical industries appear to be adjusting to the new marketplace.”
Long credited stronger customer demand and improving business confidence for the gains, noting that optimism has increased even as businesses continue to navigate tariffs and higher costs.
Perhaps the most encouraging sign was hiring. The survey’s employment index jumped from -4 in May to +25 in June, indicating many manufacturers are no longer standing on the sidelines but are beginning to add workers again.
Likewise, the new orders index climbed from +15 to +48, reaching its highest level in 64 months, while the production index rose from +14 to +35, its strongest reading since August 2021.
By the Numbers
Indicator May June Change New Orders +15 +48 +33 Production +14 +35 +21 Employment -4 +25 +29 Lead Times +22 +27 +5
Michigan Economy Scorecard
| Sector | Grade | Trend | What We’re Seeing |
|---|---|---|---|
| 🏭 Manufacturing | A | ⬆ Stronger | West Michigan posts its best PMI reading in five years as orders, production and hiring all accelerate. |
| 🚗 Automotive | B | ➡ Stable | Suppliers continue adapting to tariffs, AI investment and the transition to next-generation vehicle technologies. |
| 💼 Employment | B+ | ⬆ Improving | Hiring remains resilient statewide, with manufacturers showing renewed confidence. |
| 🤖 Technology & AI | A- | ⬆ Improving | Michigan continues attracting AI, semiconductor, defense and startup investments despite a slower national venture capital environment. |
| 🛡️ Defense & Aerospace | A | ⬆ Improving | Defense manufacturing remains one of Michigan’s fastest-growing industrial sectors as federal spending increases. |
| 💵 Consumer Confidence | B- | ⬆ Improving | Consumer sentiment has improved as gasoline prices eased and fears of a prolonged Middle East conflict diminished, though households remain cautious about inflation. |
| 🏠 Housing | C+ | ⬇ Soft | High mortgage rates continue limiting home sales and new residential construction across much of the state. |
| ⚡ Energy Costs | C | ➡ Mixed | Utility costs remain elevated while gasoline prices continue responding to global events and oil market volatility. |
| 📦 Small Business | B | ➡ Stable | Owners remain optimistic but continue citing labor costs, tariffs and uncertainty as major concerns. |
West Michigan Is Setting the Pace
Although the GVSU survey measures only West Michigan manufacturers, it remains one of Michigan’s earliest indicators of factory activity because purchasing managers are often among the first to see changes in customer demand.
The survey does not measure the number of products being manufactured. Instead, it measures whether more purchasing managers report improving business conditions than worsening conditions.
In other words, June’s results don’t necessarily mean factories are producing more goods than at any point in the past five years. Rather, they indicate the broadest share of manufacturers in five years reported that business conditions are improving—a strong sign that momentum is building across the industrial economy.
Bright Spots—and One Persistent Challenge
Despite the encouraging manufacturing data, not every industry is participating equally in the recovery.
Long noted West Michigan’s office furniture sector continues to struggle as hybrid work reduces demand for new office construction and furnishings. While companies continue upgrading existing workplaces, the pace of large-scale office expansion remains well below pre-pandemic levels.
That weakness contrasts with stronger demand in many industrial sectors, where manufacturers report improving order books and increased production schedules.
What It Means for Michigan
Taken together, the latest indicators suggest Michigan’s economy is entering the second half of 2026 on firmer footing than many economists expected earlier this year.
Manufacturers appear to be succeeding despite tariffs and higher costs rather than because of them. Rising new orders, stronger production and renewed hiring point to underlying customer demand instead of a temporary rush to build inventories ahead of potential trade policy changes.
While challenges remain—including housing affordability, elevated energy costs and uncertainty surrounding international trade—the June manufacturing survey provides one of the clearest signs yet that Michigan’s industrial economy is regaining momentum.
