Current business trends study indicates moderate growth for 2011

Courtesy Photo /
Brian Long, Director of Supply Management Research

Courtesy Photo / Brian Long, Director of Supply Management Research

Anya Zentmeyer

Although the state of Michigan is still creeping and clawing its way out of a recession, the business world of greater Grand Rapids area is looking up for the new year.

A monthly survey conducted by Brian Long, director of Supply Management Research in the Seidman College of Business at Grand Valley State University, indicated moderate growth returns to West Michigan with pattern-breaking results.

According to Long’s report, due to reduced production schedules and Christmas season, December usually proves to be a seasonally slow month. However, this time around, surveys conducted in the last two weeks of December show different results.

The index of business improvement, titled New Orders, rose from plus 15 to plus 31 while the production index bumped from 18 to 19. Index of purchases rose from plus 16 to plus 19 and the employment index went up from plus 21 to plus 27.

Long said an increase of new orders in recent months indicates that the office furniture industry is finally pulling out of the long recession as well, and industrial distributors had one of their best months in recent memory. Automotive parts suppliers followed suit with many suppliers deciding to forego holiday shut down.

“Some of them also were trying to create just a little bit of stock buffer, too, in anticipation of higher automobile sales and increased production schedules going into the new year,” Long said. “So this was a very, very positive December as Decembers go.”

Definitive factors of the 2011 economy, Long speculates, will include automotive sales, inflation, interest rates, real estate and unemployment rates.

Long said real estate has bottomed out on a local level, so although national rates are falling, Grand Rapids may see moderate improvement in 2011 while bankruptcies and foreclosures continue to add more houses to the market. He added the projected time for homes to turn to their 2005 value is up to 15 years.

Unemployment rates, however, depend on the success of the automotive industry in the coming year. Long is not as optimistic about an upturn.

“The unemployment situation unfortunately is going to dog us for most of the rest of this year throughout southwestern Michigan,” Long said.

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