SouthEast Manufacturing Continues To Gain Momentum In March

Donald Sabbarese
Don Sabbarese

KENNESAW, Ga. (Apr 5, 2016) — Southeast manufacturing continued on a path of sustainable growth in March, 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 2.2 points to 60.6 in March, based on increases for new orders, employment and supplier delivery times. This is the highest Southeast reading since February 2015. With the current level of new orders, production and employment well above their six-month averages, the upward trend is expected to continue. There is growing evidence that manufacturing may have recovered from its weakness in the second half of 2015.

March saw increases across four of the six measured areas. New orders increased 5.5 points to 67.7, with 48 percent of respondents reporting higher new orders. Production slipped 2.2 points to 66.7, but remains at a high growth level, with 40 percent reporting higher production. Employment jumped 6 points to 59.4, with 30 percent reporting a higher work force. Supplier delivery time increased 10.6 points to 57.3, with 12 percent more respondents experiencing slower delivery time.

According to Don Sabbarese, director emeritus of the Econometric Center and professor of economics at Kennesaw State University, 38 percent of March respondents expect higher production in the next three to six months, up from 31 percent in February.

“The National PMI increased 2.3 points to 51.8,” said Sabbarese. “National new orders and production increased 6.8 and 2.5 points, respectively, with readings of 58.3 and 55.3.”

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 March Southeast PMI include:

  • New orders increased 5.5 points to 67.7, 9.5 points above its six-month average
  • Production decreased 2.2 points to 66.7, 7.8 points above its six-month average
  • Employment increased 6.0 points to 59.4, 4.3 points above its six-month average
  • Supplier delivery time increased 10.6 points to 57.3, 5.3 points above its six-month average
  • Finished inventory decreased 9.0 points to 52.1points, 3.1 points below its six-month average
  • Commodity prices increased 8.9 points to 50 points, 10.2 points above its six-month average

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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.

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For more information on the Southeast PMI or to talk with Sabbarese, call 470-578-3481. 

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