GRAND RAPIDS, Mich. (WOOD) –- West Michigan is starting to feel the effects of slowing auto sales, according to a new report from a Grand Valley State University economics expert.
Brian G. Long said six consecutive months of lower vehicle sales are affecting auto parts suppliers in West Michigan, slowing economic growth.
The survey index found new business orders rose eight points during the last two weeks of July, considerably lower than last month’s index increase of 31 points. Production and purchases also slid significantly, but all indices still posted increases. The employment index dropped slightly from a 23 point increase to a 20 point increase.
Long said the 6.9 percent overall drop in July vehicle sales has forced some auto parts suppliers to cut production and cancel further expansion. Sedans saw the largest decline in sales, at 15 percent. Light trucks and SUVs dropped 1.9 percent.
>>PDF: Business trends report
Long said analysts are still worried about bloated dealer inventories, which are much higher than even before the Great Recession. An influx of vehicles returning from leasing customers compounds the problem.
Other industries are faring better, according to Long. He says the office furniture industry West Michigan is known for is stable, the agriculture industry is having a good year, and many segments of the West Michigan tourism industry are poised to have a record year.