Georgia manufacturing index declines in May


Georgia manufacturing index declines in May PMI slips 1.9 points, but still above 60 for fourth…

Georgia (Jun 1, 2012)Georgia manufacturing index declines in May

PMI slips 1.9 points, but still above 60 for fourth consecutive month.


KENNESAW, Ga.  (June 1, 2012)  —  Manufacturing activity in Georgia declined in May, accordingto the Econometric Center at Kennesaw State University’s Michael J. Coles College of Business. 

The Georgia Purchasing Managers Index (PMI)  —  a reading of economic activity in the state’s manufacturing sector  — decreased 1.9 points from April, to 61.9, as  new orders and production  declined. New orders fell 7.5 points, to 65.4; production declined by 7.5 points, to  65.4.  Georgia’s PMI of 61.9 outperformed the national PMI reading of 53.5 by 8.4 points.

“Although  the Georgia  PMI retreated in May, it still remains well above the national and southeast  indexes,” said Don Sabbarese, professor of economics and director of the Econometric Center at the Coles College of Business. “New orders and production for May remain 2.9 and 5.7 points above their six-month averages, respectively.”

Other highlights of the May PMI include:

·         Employment was down 0.3 point, to  53.8

·         Supplier delivery time was down 0.8 point, to 59.6

·         Finished inventory increased 7.1 points, to 65.4

·         Commodity prices were down 20.7 points, to 48.1


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 May PMI, or to speak with professor Sabbarese, please call 770-423-6094.


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