Georgia manufacturing index down in October
October PMI decreases following a 1.6 point increase for September
KENNESAW, Ga….
Georgia
(Nov 1, 2012) —
KENNESAW, Ga. (Nov. 1, 2012) — After an increase in September to 52, manufacturing activity in Georgia fell slightly in October to 51.7, a decrease of
.3 points, accordingto the Purchasing Managers Index (PMI) Report for Georgia, released
today by the Econometric Center at Kennesaw State University’s Michael J. Coles College
of Business.
According to the report, the decline in October is consistent with the level of activity
since July, which averaged 51.5 points over the past four months, including a high
reading of 52 and a low of 50.4. Thispattern demonstrates that Georgia’s manufacturing
sector remains flat.
“October’s PMI decrease fits a four month pattern for slower manufacturing growth
dating back to July. The eight point drop in new orders and no employment increase
were a sign that Georgia’s manufacturing growth is much weaker than the first six
months of 2012,” said Don Sabbarese, director of the Econometric Center and professor
of economics.
Highlights of the October PMI include:
- New orders were down 8 points
- Production up 4.3 points, to 54.3
- Employment did not change, remains at 50
- Supplier delivery was down 3.8 points, to 52.2
- Finished inventory was up 6.2 points, to 52.2
- Commodity prices were up 2.0 points, to 50
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 October PMI, or to speak with professor Sabbarese, please
call 770-423-6094.
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A leader in innovative teaching and learning, Kennesaw State University offers undergraduate, graduate and doctoral degrees to its nearly 43,000 students. With 11 colleges on two metro Atlanta campuses, Kennesaw State is a member of the University System of Georgia. The university’s vibrant campus culture, diverse population, strong global ties and entrepreneurial spirit draw students from throughout the country and the world. Kennesaw State is a Carnegie-designated doctoral research institution (R2), placing it among an elite group of only 6 percent of U.S. colleges and universities with an R1 or R2 status. For more information, visit kennesaw.edu.
