Ga. manufacturing sector up

The Marietta Daily Journal

One local economic indicator is starting to show small, yet positive signs of improvement.

The Georgia Purchasing Managers Index for March improved for the third consecutive month.

For March, the Georgia PMI was 45.4 points, which is an increase of five points from February. The index has improved 18.6 points this year.

The PMI is a reading of economic activity in the state's manufacturing sector.

Dr. Don Sabbarese, director of the Econometric Center at Kennesaw State University that compiles the PMI, said the five-point improvement is "encouraging."

"This is certainly putting us in a better place; we're seeing some improvement," Sabbarese said.

The increase is primarily driven by healthy increases in new orders, employment and production.

Sabbarese said while the index is showing positive signs, it doesn't mean manufacturers are going to suddenly start hiring in droves.

"This is not a sign that says the sector is back into growth mode," he said.

A PMI of 50 points shows the industry is expanding.

Sabbarese said the PMI increase likely doesn't mean much for the average consumer right now.

"It means manufacturing has probably hit its low point, and if this continues for manufacturing, then it means the majority of layoffs are behind us," he said.

The PMI is compiled from a monthly survey of about 70 manufacturers across the state. Sabbarese said he doesn't have enough participants in any one given sector to say if a certain type of manufacturer is improving more than others.

Georgia's PMI is comprised of five variables: new orders, production, employment, supply deliveries and finished inventory.

Two variables, new orders and production, did have individual readings of more than 50 points, with both variables at 51.8 points.

This shows more manufacturers saw their new orders or production either stay the same or improve over the last month, Sabbarese said.

Any improvement in the manufacturing industry could mean good news for the economy as a whole.

"The manufacturing sector tends to lead the overall economy," he said. "The manufacturing sector will be the first to rebound."