Georgia manufacturing declines again in July

July turned out to be another bad month for manufacturing activity in Georgia, signaling what is…

Georgia (Aug 2, 2011) — July turned out to be another bad month for manufacturing activity in Georgia, signaling what is becoming a disturbingly negative trend.


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The Purchasing Manager's Index declined for the fourth straight month, according to a new report from the Econometric Center at Kennesaw State University's Coles College of Business. The index is essentially a snapshot of factory activity across the state.

New orders, production, employment, finished inventory and commodity prices all fell significantly in July from June. Those are five of six factors considered in the survey of the state's manufacturers.

"The drop off was expected, but its magnitude was unexpected," said Don Sabbarese, director of the Econometric Center.

Georgia's PMI for July was 50.7. That's down from 56.9 in June, 64.6 in May, 67.4 in April and 67.6 in March.

A PMI reading of more than 50 indicates that manufacturing activity is expanding while a reading of less than 50 is an indication of contraction.

Georgia's PMI was below the national index of 50.9 in July, and the Southeast regional index of 53.7.

A much lower percentage of the manufacturers who were surveyed reported higher new orders, production and employment in July than did in the spring when factory activity was still on an upswing.

"Such sharp adjustments in these components reflect just how anxious and unsure producers are about the sustainability of their markets and the economy, Sabbarese said.

While some improvement is expected in coming months as the auto industry recovers from supply chain problems in Japan, other economic problems are raising concerns.

Manufacturing is considered critical to an economic recovery. It accounts for a large percentage of the nation's gross domestic product, and manufacturing jobs tend to pay better and to have more of a positive ripple effect on the economy.


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