Southeast manufacturing index falls below national index by 5 points

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Regional index declines for fourth consecutive month KENNESAW, Ga.  (Aug. 6, 2013) —…

Georgia (Aug 6, 2013)Regional index declines for fourth consecutive month

KENNESAW, Ga.  (Aug. 6, 2013) — Manufacturing activity in the Southeast dropped 2.7 points, slipping below the national index, which jumped 4.7 points in July, according to the Southeast’s Purchasing Managers Index (PMI) report released today by Kennesaw State University’s Econometric Center in the Michael J. Coles College of Business. The July Southeast PMI is 50.2, while the national index is 55.4.

Don Sabbarese, director of the Econometric Center at Kennesaw State, explained that the decline in the Southeast PMI was based on strong declines in new orders and production, with a smaller decrease in employment. National new orders and production registered 11 and 18 points higher, respectively, than Southeast’s new orders and production.

“The decreases in new orders and production in the Southeast are cause for concern should this pattern continue in the future,” said Sabbarese. “The national and many other regional surveys are moving in a positive direction and offer some hope that the Southeast will return to that pattern.” This is the fourth consecutive month for decreasing Southeast PMI.

Six Southeastern states — Alabama, Florida, Georgia, Louisiana, Mississippi and Tennessee — are included in the Econometric Center’s monthly regional report. Three states — Florida, Georgia and Tennessee — recorded lower new orders and production, which contributed to the 2.7-point drop.

Highlights of the July Southeast PMI include: 

·         New orders decreased 11.8 points to 47.2, based on declines in Florida, Georgia and Tennessee

·         Production decreased 10 points to 46.2, based on declines in Florida, Georgia, Louisiana, Mississippi and Tennessee

·         Employment decreased 1.5 points to 54.7, based on decreases in Georgia, Louisiana and Mississippi

·         Supplier delivery increased 5.7 points to 55.7, based on increases for Alabama, Florida and Georgia

·         Finished inventory increased 4.3 points to 47.2, based on increases for all states except Tennessee

·         Commodity prices increased 12 points to 57.5, based on price increases in all six states.

The Southeast 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.

For more information on the Southeast PMI or to talk with Sabbarese, call 770-423-6094. 

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