February economy survey yields positive results
February’s Institute for Supply Management Research survey indicates West Michigan’s economy continued its positive performance.
The surge in Omicron variant cases of COVID-19 began abating in February. And as it did, consumer confidence grew. Purchases and new orders increased with demand. Good news for West Michigan industrial manufacturers. But with Russia’s invasion of neighboring Ukraine, Brian G. Long, director of Supply Management Research in the Seidman College of Business at Grand Valley State University, says, “all bets are off.” Although the past does tells us military conflicts can be good for local industry. “It means that there will be a pick-up in practically everything that we do because we supply the supply chains around the world.”
But with U.S. economic sanctions imposed on Russia in recent days, commodity prices are skyrocketing.
“As a result, companies are starting to question what their profitability picture is going to look like if they can’t pass these costs along to some of their major customers.”
More inflationary pressure driving up the Consumer Price Index.
“And it’s probably going to rise to a level that we haven’t seen for at least 40, 45 years or so.”
Should Russia and Ukraine resolve the conflict, Long suspects a sudden decline in the price of major commodities and a return to an economy recovering from the pandemic.