Manufacturing activity in West Michigan remained in expansion for the sixth consecutive month in July, although the pace of growth moderated, according to the latest West Michigan Current Business Trends report from Grand Valley State University.
The survey’s New Orders Index, a measure of business improvement, declined to +30 in July from +49 in June. The Production Index also eased, falling to +19 from +35 the previous month. Employment growth slowed as well, with the Employment Index dropping to +6 from +25.
“The West Michigan economy remains positive, but momentum is slowing. Businesses continue to report solid sales and strong demand, particularly from data center growth, while facing higher costs from tariffs, energy prices, and supply chain pressures,” said Brian Long, Research Director at Grand Valley State University.
Despite the slowdown, the report says many manufacturers continue to report a positive business environment. Some respondents cited strong sales driven in part by increased demand from data centers, although businesses remain cautious because of uncertainty surrounding the conflict involving Iran and its potential effects on prices and supply chains.
Survey comments reflected a mixed outlook. Some manufacturers reported continued strength in new orders, while others said customers are pushing for lower prices as suppliers seek price increases. Other respondents pointed to tariffs, freight costs and broader economic uncertainty as ongoing challenges.
Key Participant Comments for July
“Our customers requesting lower prices but our suppliers are reaching out to get higher prices due to market conditions.”
“New orders and manufacturing continue to remain strong given the current global issues in the markets.”
“We continue to be flat, and the ever-changing Middle East conflict seems to be doing harm to the business world.”
“Almost all refunds from IEEPA tariffs have been received. We’re disappointed but not surprised to see a new round of tariffs replacing Section 122.”
“We’ve been negotiating/mitigating price increases to control costs and offset freight”
“We cannot sustain another 4 months in this economy.”
National manufacturing also remained in expansion during July. The report notes the Institute for Supply Management’s manufacturing survey marked its 21st consecutive month of growth, while S&P Global reported continued expansion but warned that production and sales growth are softening amid supply chain disruptions, higher input costs and weakening exports.
Looking globally, J.P. Morgan’s Global Manufacturing PMI remained above the growth threshold for the 12th straight month, although it slipped slightly in July. The report says tariffs, energy prices and global conflicts continue to weigh on manufacturers’ outlook for the months ahead.
