GVSU Economist: West Michigan economic recovery resembles a ‘lopsided W’

By Dottie Barnes
Grand Valley State University


Brian Long is a local business forecaster. Credit: GVSU

The economic recovery in West Michigan currently resembles a “lopsided W,” said Brian G. Long, director of Supply Management Research in Grand Valley State University’s Seidman College of Business.

Long said in a W-shaped recovery, the economy begins to recover rapidly, but then falls into a second period of decline. He said it is also known as a double-dip recession as the two economic declines create the shape of a W.

“We know the COVID-19 recession has resulted in displaced workers now seeking work, and we know from our survey respondents that there are at least some job openings that may absorb some of these frictionally unemployed workers,” Long said. “This is especially true for our automotive parts producers. However, it is doubtful the West Michigan industrial economy can soon absorb all of the recently unemployed workers. Hence, a lopsided ‘W-shaped’ recovery is most likely.” 

Long surveyed local business leaders and his findings below are based on data collected during the last two weeks of October.

The survey’s index of business improvement (new orders) came in at +16, virtually unchanged from last month’s rate of +18. The production index rebounded to +29, from +20. The index of purchases came in at +12, virtually unchanged from +14, and the employment index fell to -2, from +9.

Long said similar to last month, the overall mood of West Michigan business leaders is mixed. “Both capital equipment and office furniture manufacturing activities are weak, but automotive parts producers appear to have turned the corner,” he said.

He also said the national economy appears to be on its way to a “V-shaped” recovery, where a quick and sustained recovery takes place after a sharp economic decline.

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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