"The obvious caution is that we cannot expect too much more dynamic growth from this segment of the economy, and need to focus attention on other industries for future growth."
Economist Brian Long wonders how long the recovery can last GRAND RAPIDS, MI – Brian Long, the Grand Valley State University economist who surveys local purchasing managers every month, is worried that the automotive sales boom that has fueled West Michigan’s economic recovery is growing long in the tooth.
“For West Michigan, a major portion of our economic recovery has been based on the revival of the auto industry,” said Long, the director of supply chain management research at GVSU, in his monthly report issued Friday, Sept. 5.
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“The obvious caution is that we cannot expect too much more dynamic growth from this segment of the economy, and need to focus attention on other industries for future growth,” Long said.
“Like many years in the past, the August rate of economic growth, which has already been slow, remained positive but came in a little slower,” said Long in his latest report issued Friday, Sept. 5.
The “pleasant surprise” for August came in Long’s employment index, which rose to a 16-month high as more employers reported new hires.
Long said his index of new orders for August fell back slightly but remained positive. “The summer vacations and more relaxed work pattern of August mean that some major purchase decisions tend to be put off until September or October,” he said.
“The comments from survey participants remain positive, but some firms are now in a wait-and see mode regarding the future direction of the economy,” Long said.
“For our individual industry groups, the automotive parts producers are in full swing for the 2015 model year, although a couple express reservations about production schedules for early 2015,” he said.
“The office furniture business remains positive, but just like last month, the smaller firms are outpacing the larger “integrated” firms.
“August is usually an off month for the industrial distributors, so it was good to see that most firms reported business to be fairly steady this year. The capital equipment industry is marking time until fall “decision” season kicks in. “
Long said West Michigan’s long economic recovery could be rattled by a successful terrorist attack.
“Although there is no end in sight for continued positive growth in West Michigan, it is worth repeating what we have said for the past ten years: Should a significant terrorist attack occur on American soil, the confidence of our country would be so shaken that we would probably slide into a recession,” he said.
Jim Harger covers business for MLive/Grand Rapids Press. Email him at jharger@mlive.com or follow him on Twitter or Facebook or Google+.