Georgia manufacturing index records third consecutive month above 60


Georgia PMI dips slightly to 67.4 even as new orders increase   KENNESAW, Ga. (May 2, 2011)…

Georgia (May 2, 2011)Georgia PMI dips slightly to 67.4 even as new orders increase


KENNESAW, Ga. (May 2, 2011) — Manufacturing activity in Georgia remained strong and stable in April, according to the Econometric Center at Kennesaw State University’s Coles College of Business. 

Georgia’s Purchasing Managers Index (PMI) — a reading of economic activity in the state’s manufacturing sector — for April was 67.4, down 0.2 point from March’s level of 67.6. Despite the dip, the latest reading reveals that more manufacturers continue to experience growth. Fifty-two percent of survey respondents saw higher new orders, while only 3 percent saw a decline. Forty-five percent of respondents reported increased hiring.

Georgia’s PMI for April is 7 points higher than its national counterpart, which recorded 60.4.

“Growth remains strong and solid for Georgia manufacturers.” said Don Sabbarese, professor of economics and director of the Econometric Center at the Coles College of Business. “We are now into three consecutive months of 60-plus readings, and this confirms a distinct and broad-based improvement in manufacturing activity.”

New orders were up by 4.5 points, to 74.2, the highest level in 11 months.

Highlights of the April PMI include:

  • Production was down by 1.6 points, to 74.2  
  • Hiring was down 0.3 point, to 69.4
  • Commodity prices decreased 5.4 points, to 85.5. The lower commodity price reading of 85.5 is the first decrease in 2011
  • Finished inventory increased 0.7 point, to 61.3
  • Supplier delivery time decreased 4.1 points, to 58.1

The Georgia PMI provides a snapshot of manufacturing activity in the state, just as the monthly PMI released by the Institute for Supply Management provides a picture of national manufacturing activity. A PMI reading above 50 indicates that manufacturing activity is expanding; a reading below 50 indicates it is contracting.

The Georgia PMI reading is a composite of five variables — new orders, production, employment, supply deliveries and finished inventory. A sixth variable, commodity prices, is compiled by the Coles College’s Econometric Center but does not go into the PMI calculation.

The PMI, compiled from a monthly survey of manufacturers, is the earliest indicator of market conditions in the sector. Since manufacturing –– which accounts for 11 percent of GDP –– is sensitive to changes in the economy, it can also reveal changing macroeconomic trends. 

The PMI’s value is in its timeliness and sensitivity to variables such as interest rates, global markets and other economic changes. The Georgia PMI provides valuable data used by institutions such as the Federal Reserve Bank of Atlanta to assist in their analysis of current economic conditions, along with many other data sources, to get a picture of economic activity. 

For a full report of the April PMI, or to speak with professor Sabbarese, please call 770- 423-6094.


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