West Michigan Economy Still Growing Despite Steel, Aluminum Tariffs

GRAND RAPIDS – Despite steel and aluminum tariffs, West Michigan’s economy continues to grow a new report from Grand Valley State University contends.

Brian Long, director of supply chain management research at GVSU’s Seidman College of Business, said his survey of purchasing managers index tick up by two points over the previous month to 34, while the purchasing index jumped 15 points to 37.

“Right now, we see the numbers very positive and right now, rolling into the spring and summer, we have to say that unless there is some unforeseen event, we’re going to be doing very well as the summer goes along,” Long said, noting that the “bounce” comes from the tailwinds of corporate tax cuts taking effect.

Nonetheless, unnamed respondents to Long’s survey say they’re feeling squeezed by President Trump’s tariffs on imported steel that were announced last month. The announcements caused pricing volatility, with one respondent noting an immediate 30-percent increase when the tariffs were announced.

In comments accompanying his report, Long noted that the tariffs may have little direct effect on West Michigan companies, which get the majority of the aluminum from exempted countries like Canada and Mexico — also the source for 16 percent and 9 percent, respectively, of imported steel. Just 2 percent of imported steel comes from China, he added.

“The actual amount of steel and aluminum impacted by the tariffs is fairly small, and very little of it actually makes its way to West Michigan. That’s the good news. For the bad news, anyone familiar with the industrial market knows that suppliers use any excuse they can to raise prices,” Long wrote.

Meanwhile, hiring and job creation continues on an upward trend both locally and nationally, according to economic data.

Michigan’s unemployment rate stands at 4.8 percent for February, according to the most recent data from the Department of Technology Management and Budget. In West Michigan, many counties out-performed the state average. That includes Ottawa County (3.8 percent), Kent County (3.9 percent), St. Joseph County (4.1 percent), Kalamazoo County (4.4 percent) and Ionia County (4.6 percent).

To economists like Long, that the region continues to generate significant job growth amid a tight labor market makes for positive news.

“Kent County between January and February added an estimated 4,700 jobs. Now that’s a lot,” Long said. “The same is true of neighboring counties.”

This story was published in MIBiz.