West Michigan’s industrial economy showed little movement in October as ongoing tariff battles continued to disrupt planning, squeeze margins, and stall purchasing activity, according to the latest monthly survey of regional business trends from Grand Valley State University.
New orders — the survey’s key measure of business improvement — came in only slightly weaker (-4) than September (-3) and far below August (-16). Production held steady at +4, but activity in purchasing offices remained soft, with the purchases index slipping to -16 from -15.
According to survey respondents, tariffs remained the central obstacle. After eight months of trade uncertainty, many firms are still wrestling with cost increases they cannot absorb or pass along. Some have managed to work around shifting price structures, but others report being “stuck between a rock and a hard place,” unable to negotiate relief from suppliers or customers.
There were signs of easing inflationary pressure. The local price index dropped to +12, down from +23 in September and well below May’s two-year high of +42. Nationally, the Institute for Supply Management’s price index fell to +16, from +24, tracking a similar downward trend.
At the national level, ISM’s manufacturing index posted 48.7, a slight decline from 49.1 in September, while its new orders index held at -6. The more optimistic S&P Global survey edged up to 52.5 from 52.0. Globally, the J.P. Morgan worldwide purchasing managers index improved to 50.0, up from 49.8, returning to neutral territory.
Despite confusion around tariffs and the broader outlook, short-term business sentiment in West Michigan improved. The three-to-six-month outlook rose to +7, up from -7, turning positive for the first time since June. The long-term outlook — covering the next three to five years — increased to +31, up from +29.
Employment indicators offered mixed signals. Michigan’s statewide jobless rate, estimated at around 5.2%, remains among the highest in the country, although updated data was unavailable due to the federal government shutdown. Nationally, ISM’s employment index ticked up to -9 from -13, while West Michigan’s index returned to positive territory at +2, up from -8.
One bright spot for consumers came from the housing market. Following the Federal Reserve’s September rate cut, the average 30-year mortgage rate has dropped from 6.65% in early September to 6.19% as of November 6.
Overall, survey director Brian Long said the economic mood remains “confused and frustrated,” with both local and national purchasing indexes showing sideways movement. Still, he emphasized there is no current evidence of an impending recession, and expressed hope that the nation’s trade disputes — especially with China — will be resolved soon.
