GRAND RAPIDS – As 2026 approaches, new survey data suggests the West Michigan economy continues to lose momentum, even as parts of Michigan and the broader U.S. economy show signs of stabilization rather than decline.

The latest monthly economic survey from Grand Valley State University shows most key indicators for West Michigan remaining in negative territory. While some measures improved slightly from earlier lows, the overall picture points to continued caution among manufacturers and supply-chain businesses that form the backbone of the region’s economy.

Economists describe the current conditions as “soft” rather than recessionary — but the persistence of weak new orders and subdued hiring suggests West Michigan is struggling to regain traction as businesses head into a new year.

Manufacturing-Heavy Region Feels the Slowdown First

West Michigan’s economic profile helps explain why the region remains under pressure. Compared with other parts of the state, the region is more heavily concentrated in traditional manufacturing, including automotive suppliers, industrial components, furniture, and materials processing.

In the most recent survey:

  • New orders remained negative, signaling weak future demand

  • Production stayed in contraction territory

  • Employment intentions showed continued caution, with more firms reducing staff than adding workers

While some business leaders reported conditions are no longer deteriorating as rapidly as earlier in 2025, few see a clear path to expansion in the near term.

That hesitancy reflects uncertainty about customer demand, higher borrowing costs, and lingering supply-chain realignments — pressures that tend to hit manufacturing-centric regions earlier and harder than more diversified metro economies.

How West Michigan Compares With the Rest of Michigan

Across Michigan, economic conditions are uneven. Metro Detroit and Ann Arbor continue to benefit from automotive R&D, advanced manufacturing, mobility technology, and university-driven innovation, providing buffers that West Michigan lacks.

While Michigan as a whole still faces challenges — including slower population growth and workforce constraints — statewide indicators suggest modest stabilization rather than broad contraction. Some regions are seeing steady investment in electrification, defense manufacturing, and semiconductor-adjacent activity, helping offset weakness in traditional industrial segments.

West Michigan, by contrast, remains more exposed to:

  • Slowing industrial orders

  • Cost-sensitive consumer demand

  • Tighter margins among suppliers tied to national manufacturing cycles

That exposure explains why survey results show West Michigan underperforming the state average, even as Michigan avoids a sharper downturn.

National Economy Shows More Resilience

At the national level, the United States economy presents a more resilient — if cautious — picture.

Economic forecasts heading into 2026 point to:

  • Continued, modest GDP growth

  • Slower but steady job creation

  • Cooling inflation compared with earlier peaks

While U.S. manufacturers are also grappling with weaker demand, the national economy benefits from a more diversified base, including technology, health care, energy, and services — sectors that help offset softness in industrial production.

That diversification helps explain why West Michigan’s slowdown appears more pronounced than national trends. In regions where manufacturing dominates, even modest pullbacks in orders can ripple quickly through employment, capital spending, and supplier networks.

A Wait-and-See Economy

For now, business leaders across West Michigan appear to be in wait-and-see mode.

Rather than cutting aggressively, many firms are holding steady — delaying hiring, postponing equipment upgrades, and closely monitoring customer pipelines. The slight improvement in some survey indexes suggests confidence may be stabilizing, but not yet rebounding.

Economists caution that without a pickup in new orders by mid-2026, the region risks falling further behind faster-growing parts of Michigan and the country. At the same time, any renewed strength in automotive production, infrastructure spending, or reshoring initiatives could quickly improve conditions for West Michigan manufacturers.

For now, the message from the data is clear: West Michigan is not in crisis, but it is underperforming, caught between a cooling industrial cycle and an uneven economic recovery that favors more diversified regions.