GVSU Report: Tariffs, Higher Rates Slowing West Michigan Economy

GRAND RAPIDS – A study by Grand Valley State University researchers suggests the West Michigan economy is beginning to feel the effects of the tariffs implemented by President Donald Trump’s administration.

Brian Long, director of supply chain management research at GVSU’s Seidman College of Business, said his recent survey of local businesses and purchasing managers shows signs the economy is leveling off.

“Regrettably, new orders — our index of business improvement — turned slightly negative in July, indicating that probably the tariffs are starting to have an impact on West Michigan,” Long said.

“The other statistics in our survey are still marginally positive, so I’ve got to rate July’s results as flat as opposed to falling.”

In addition to the decline in new orders, Long’s production index, which measures business output, dropped sharply in July. Other signs of a slowing economy include reduced short-term business confidence and a rise in Grand Rapids’ year-over-year unemployment rate from 5.4% to 6.3%.

Long noted the West Michigan results from his survey mirror national trends recorded by the Institute for Supply Management and Standard and Poor’s.

“Neither of those national surveys indicate that we are headed for anything that resembles a recession, but it does indicate that the economy is slowing,” Long said.

“Of course this is what’s supposed to happen with higher interest rates, and none of our statistics indicate that we are headed for a recession anytime soon.”

Here’s a look at the key index results from July’s survey of West Michigan businesses: