SouthEast Manufacturing Sees Strongest Numbers Since 2014

Donald Sabbarese
Don Sabbarese

KENNESAW, Ga. (Mar 5, 2016) — Southeast manufacturers reported substantial strength in April, driven by strong readings for new orders, production and employment, 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.

Southeast manufacturing activity increased 0.5 points to 61.1in April, based on increases for four of the five underlying components. This is the highest Southeast reading since April 2014. The current level of new orders, production and employment are well above their six-month averages.

“This higher level may be difficult to continue,” said Don Sabbarese, director emeritus of the Econometric Center and professor of economics at Kennesaw State University. “But, if it does, it will bode well for manufacturers. So far 2016 has shown continued strength and a substantive improvement over 4th quarter 2015.”

April recorded continued improvement for production and employment. Production increased 2.3 points to 68.9, with 46 percent of respondents reporting higher production. Employment increased 2.8 points to 62.2, with 46 percent of respondents reporting higher employment. New orders slipped 1.5 points, but remain stable at 66.2 points. Supplier delivery time increased 0.8 points to 58.1. 46 percent of respondents expect higher production in the next three to six months, up from 38 percent in March.

The National PMI decreased 1.0 point to 50.8. National new orders, production, supplier delivery time and finished inventory decreased 2.5, 1.1, 1.1, and 1.5 points, respectively, with readings of 55.8, 54.2, 49.1, and 45.5.

Six Southeastern states — Alabama, Florida, Georgia, Louisiana, Mississippi and Tennessee — are included in the Econometric Center’s monthly regional report. Four of the six experienced higher PMI readings.

Highlights of the April Southeast PMI include: 

  • New orders decreased 1.5 points to 66.2, 6.4 points above its six-month average
  • Production increased 2.3 points to 68.9, 8.2 points above its six-month average
  • Employment increased 2.8 points to 62.2, 5.5 points above its six-month average
  • Supplier delivery time 0.8 increased points to 58.1, 5.3 points above its six-month average
  • Finished inventory decreased 2.1 points to 50 points, 5.0 points below its six-month average
  • Commodity prices increased 10.8 points to 60.8 points, 17.6 points above its six-month average

                                              - more -

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 470-578-3481 

©